Lord Shutt of Greetland: My Lords, splendid although it may be to talk about increased capacity, I refer to present capacity and in particular to the difficulties that Sea Containers, the parent company of GNER, is reported to be in. Do the Government have contingency plans for the operating concession if any problems arise in that area?

Lord Bassam of Brighton: My Lords, we utterly condemn the suicide bombing in Colombo on 25 April. The Liberation Tigers of Tamil Eelam is a proscribed organisation under the Terrorism Act 2000. Proscription is a tough power which makes it illegal for an organisation to operate or fund-raise in the United Kingdom. Of course, enforcement of the law is a matter for the police and prosecuting authorities, and we expect them to take these issues extremely seriously.

Lord Naseby: My Lords, is the Minister aware that the Tamil Tigers is still recruiting child soldiers in north-east Sri Lanka; that the suicide bomber was a pregnant young woman; and that the Tamil Tigers still proclaims that it wishes to have peace in that country? Meanwhile, the Minister says that proscription is tough on those proscribed. Is he aware, nevertheless, that there is continual money laundering in the United Kingdom; that illegal rallies take place under the flags of Tamil Eelam; that bogus charities are being set up; and that TTN is broadcasting Tamil Eelam propaganda in the UK? He may say that the issues are dealt with toughly and rest with other government bodies, but is he aware that the proscription is being flouted? Is it not the responsibility of the Home Office and the Government in general to make sure that proscription means what it is meant to mean and that it is not just flouted almost daily?

Lord Bassam of Brighton: My Lords, we believe that proscription is a tough power. It makes it illegal for organisations to operate in the United Kingdom. Membership of and fund-raising for a proscribed organisation constitute serious criminal offences. LTTE has been proscribed since March 2001—I know that because I took the order through your Lordships' House. We take these matters seriously. There are constant discussions between the Government and the enforcement authorities. What happened last year is a good example of the matters being dealt with exactly as they should be. The Tamil Rehabilitation Organisation, a charity, was closed down as a result of the police and the Charity Commission acting on evidence that funds were being channelled to LTTE.
	Clearly, the police and the prosecuting authorities can act only on the information that they have. I am extremely grateful to the noble Lord, who I know has great experience in the field, for drawing the matter further to the public's attention. That is a desirable thing to do, and we need to keep the pressure up.

Lord Howell of Guildford: My Lords, is the Minister aware that there is a lot of concern about the activities of this organisation? Is he aware—I am sure he is—that in the past 10 years there have been more suicide bombings in Sri Lanka, many of which are associated with this organisation, than anywhere else in the world? The number far exceeds that in the Israel/Palestine horror, for example. Is he also aware of the revolting practice of planting bombs on little children, giving them flowers to present to visiting politicians and dignitaries and then detonating the bomb so that it kills the child and the dignitary at once—the most sordid and sickening practice that one can possibly imagine? Will he therefore to take to heart the representations that he is hearing today that something very firm needs to be done to prevent these people pursuing their activities in this country or, indeed, anywhere else?

Lord Redesdale: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.
	Moved, That the order of commitment be discharged.—(Lord Redesdale.)

Lord Bassam of Brighton: My Lords, with the leave of the House, I shall now repeat a Statement made by my right honourable friend the Home Secretary in another place. The Statement is as follows:
	"With permission, Mr Speaker, I would like to make a Statement on the deportation and removal of foreign national prisoners. I will update the House on our progress in considering the cases which, I reported last week, had been released without proper consideration, and I will set out the facts in relation to the reports on foreign national prisoners and the removal of failed asylum seekers which my department received over a period of time. I will also set out the action taken by my department in response to those reports, including the robust procedures put in place to deal with the very specific issue of consideration of deportation pre-release.
	"Finally, I will set out, as promised a week ago, the conclusions I have come to on reforms necessary to the policy framework in which deportations are considered and dealt with. Let me begin by confirming, as set out to the House last week, that, as a result of decisions taken earlier this year, including improved management structures, more resources and tightened procedures, we have for the past month had a system to ensure that further cases cannot be missed. This situation will continue to improve as we move over time, as a matter of routine, to consider for deportation all potential cases a year before they leave prison, or at the beginning of the sentence, if that is less.
	"Last Friday I wrote to you, Mr Speaker, to set out our progress in dealing with those cases released without prior consideration of deportation. I would now like to update the House on the figures I published then. As of yesterday evening, consideration of all the most serious 79 cases had been completed, with deportation action having been commenced in respect of 70. The remaining nine are cases where deportation action is not being pursued, in accordance with current policy criteria. Thirty-two of those 70 are now accounted for and either deported or within our control. The Immigration Service and police are continuing priority operations to bring the remainder under control. I will not give further details at this stage as the House will appreciate that my first priority is the efficacy of these operations.
	"As I made clear in last Friday's letter, Mr Speaker, our second priority for consideration is the 103 cases for which, as we stated to the Public Accounts Committee, the type of offence was unknown. Data on these cases is now complete and I can say that there are 11 of these cases where the original offence was within our category of 'more serious offences'. Consideration for deportation of all but one of these cases has now been completed and deportation action has commenced in respect of seven of them. Since their release none of these individuals has committed any of the more serious further offences.
	"This deals with all the cases where individuals were originally convicted of more serious offences. Of the 1,023 cases in total, consideration has commenced in 574 cases, of which 554 have been completed, with deportation action being pursued in 446 cases. Perhaps I should add, Mr Speaker, that almost all of the cases which have so far been given prominence in the media in recent days are not among those on which I have been reporting to the House, though some do indeed raise important issues of policy.
	"Mr Speaker, whatever the historic failings, I want to thank all of those engaged in the very intensive work which has continued throughout the bank holiday weekend. This has included a major police incident room in Portsmouth, a casework operation in the Immigration and Nationality Directorate (IND) in Croydon, work by prison and probation staff, and joint police and IND operations to detain offenders decided for deportation. There is a very high operational commitment to this work, for which I want to express appreciation.
	"Mr Speaker, from the outset I have acknowledged that there has been a systemic failure within the Home Office, which I regret and for which I have apologised. For example, it was only in 1999 that records began to be kept in this area at all. However, there have been a number of allegations of inaction by the Home Office, in a range of areas over a period, which have portrayed what I believe to be a false position. I want now to set the record straight.
	"There are three distinct issues. The first is the broad issue of the rising number of foreign nationals in our prisons, from 5,587 in 2000 to almost 10,000 in 2005, and the policy framework for their deportation. The second is the removal of failed asylum seekers and our action to reach the so-called 'tipping point'. The third is the specific operational question of the backlog of cases. The first issue, the overall approach to foreign-national prisoners and their deportation, was the one raised over a period by respective Chief Inspectors of Prisons. In summary, they have mainly made the argument that the Government were not paying sufficient attention to foreign-national prisoners or their human rights, particularly in relation to detention after the end of their sentence.
	"The Home Office has sought to deal with these concerns by a variety of means, which, among other things, led to the deportation of about 3,000 foreign-national prisoners in 2004 and 2005, a figure to compare with a total foreign-national prisoner population of 9,690 in 2005. Anne Owers acknowledged some progress on this broad issue in her report of 2004–05.
	"The second issue, the removal of failed asylum seekers, was the main focus of the NAO report of July 2005, entitled Returning Failed Asylum Seekers. The overall conclusion of the report was that the prompt departure or removal of an unsuccessful asylum applicant should be prioritised, a conclusion which squared exactly with the Home Office prioritisation of asylum in general and, in particular, action to reach the point where more asylum seekers were leaving the country than there were unfounded new applications. This was indeed achieved in February this year and was widely welcomed.
	"The NAO report also noted that action on criminal cases was not being initiated early enough to allow preparations for removal to be made pre-release from prison, though it acknowledged the increase in resources already directed to dealing with these cases. The Home Office immediately responded to the NAO comment. Additional staffing of 90 caseworkers to come on stream from January 2006 was identified, as was a further £2.7 million of resource to come online from 1 April 2006. Immigration Service staff were placed in four London prisons, and surgeries were held in 60 prisons; a weekly report on the foreign national prisoner population was initiated; and new arrangements were made to move foreign nationals who had completed their sentences from prison to immigration detention facilities at the rate of around 300 a month. In addition management arrangements were strengthened.
	"This NAO report was the basis for the Public Accounts Committee evidence session on 26 October 2005, which also focused on the removal of failed asylum seekers. I have already acknowledged the important role played by the Public Accounts Committee in focusing attention upon these matters. I also very much welcome the announcement that the Home Affairs Committee will extend its inquiry to cover this matter. The House may recall that I first raised publicly my concern over the broad policy issues raised by the increase in the number of foreign-national prisoners in evidence to the Home Affairs Committee on 25 October last year.
	"Following the PAC hearing, the Home Office set about collecting and cleansing the data in order that we could report properly to the committee and the public on the true size and nature of the backlog, and take the appropriate action. The first report was made to the PAC in November. However, closer analysis revealed that the backlog was larger than previously thought and, crucially, that serious offenders were among the backlog. This was reported to me at the end of March 2006, together with plans to re-check the information before it was put into the public domain, to begin casework on this backlog, and to work with prisons and probation on the serious cases.
	"The PAC published its report on 14 March. It did address the issue of foreign-national prisoners in the body of its report, but it was not in a position to draw firm conclusions or to make firm recommendations.
	"The rise in the number of foreign nationals in our prisons and the overall policy framework for dealing with issues of their deportation is a longstanding concern on which detailed work has been proceeding for some months. I would now like to report my preliminary conclusions to the House. These are complex and difficult issues. I will shortly publish, before the end of May, a consultation paper with specific, detailed proposals from the beginning to the end of the process. The guiding principle will be that foreign nationals guilty of criminality should expect to be deported. To achieve this I will consult in the following areas. First, the data which identifies an individual as a foreign national must be captured at the beginning of the criminal justice system, including at the point of arrest and as the case proceeds through the courts. At each stage there should be sanctions against individuals who give false information on nationality or indeed no information at all.
	"Secondly, it is important to ensure that the issue of deportation is raised throughout the sentencing process. Following recommendations from the Sentencing Advisory Panel, the Sentencing Guidelines Council will shortly be publishing draft guidelines to set clear criteria according to which judges should make deportation recommendations when sentencing.
	"Thirdly, we need to deport prisoners at an earlier stage in their sentences. Ideally, prisoners should serve their sentences in full in their home countries, which also assists rehabilitation. The UK currently has prisoner transfer agreements with 90 countries; we have recently ratified an agreement with India and others are awaiting ratification. Within the EU, we are strongly supporting the efforts of the Austrian presidency to secure a directive which will enable the repatriation of prisoners within the EU without requiring the consent of the prisoner. In addition, the Criminal Justice Act 2003 introduced arrangements to consider whether prisoners should be deported before the end of the sentence, and we will consult upon proposals to enable that to happen earlier in a prisoner's sentence.
	"Fourthly, I want to make it clear that the Government not only intend to ensure that the current system operates effectively but also seek after consultation to extend the categories of offenders who are considered for deportation. We will therefore publish proposals to consider for deportation a wider range of offenders.
	"I want to state clearly that, where deportation can properly be considered, the clear presumption should be that deportation will follow unless there are special circumstances why it cannot. We will consult on whether this presumption should be made statutory through primary legislation. Such a presumption would include: all criminals sentenced to imprisonment, all those convicted for an offence listed in an order under Section 72 of the Nationality, Immigration and Asylum Act 2002, all those on the sex offenders register, repeat offenders, and, of course, all those recommended for deportation by the sentencing judge. We believe that there is a strong case for extending these proposals to any individual convicted of an imprisonable offence, whether or not a sentence of imprisonment was actually given, and we will consult on that.
	"These proposals would replace the current practice of considering for deportation only non-EEA nationals with a sentence of 12 months or more, EEA nationals with a sentence of 24 months or more, cases where the individual has three lesser convictions in a five-year period, and all cases where the sentencing judge has recommended deportation.
	"In relation to our policy framework, I have already said that we are now ensuring that all deportation decisions are being taken before an individual is released. That will continue but I will also consult on the following steps to ensure effective implementation of deportation and removal decisions: full use of the less burdensome process of administrative removal rather than deportation in eligible cases—that is, where individuals have no or limited leave to remain; more effective procedures in relation to psychiatric hospitals; a new power in primary legislation to enable us to detain an individual pending consideration of whether they should be deported or removed as a result of their criminal conviction; amending primary legislation so that deportation appeals, save for those raising asylum or human rights issues that are not clearly unfounded are heard after the individual has been deported from the UK; and the introduction of an automatic bar on return for all those who are subject to administrative removal due to criminality, as is already the case with those who are deported.
	"Finally, I should add that I will also consult on proposals to achieve a more coherent approach to taking criminality into account in decisions on who is allowed into the country, who is allowed to stay, who is granted settlement, and who can acquire British citizenship.
	"These are significant proposals which, as I said earlier, we have been preparing for some months. They will, I am sure, also be controversial but I hope that unlike with some previous legislation in this area we can rely on the full-hearted support of both the main opposition parties in ensuring that foreign nationals who commit crimes are deported rapidly to the countries from which they come.
	"This has been an unedifying episode for all of us in the Home Office who are charged with the protection of the public. But I said that I would stay and put the situation right. I have set out the results of the intensive work being done by the agencies to deal with the outstanding cases. I have set out steps taken to improve our systems on foreign-national prisoners, including robust procedures which now mean that the appropriate processes are in place, and I have set out my proposals to deport more offenders, more quickly".
	My Lords, that concludes the Statement.

Baroness Anelay of St Johns: My Lords, I thank the Minister for repeating the Statement made earlier today by his right honourable friend. I respond to it with a feeling of regret about the shambles over which the Home Secretary has presided. I made it clear on a previous occasion, quite recently, that the Home Secretary has been regarded with a broad degree of respect including, certainly, by me. The sorry tale of the failure to stem the tide of the release of foreign prisoners into our community when they should have been considered for deportation before their release is a stain on his career.
	Some 735 of the 1,023 foreign prisoners were released between February 1999 and the time when Mr Clarke became Home Secretary. But 288 more foreign criminals were released after August 2005—that is, after the Home Secretary explicitly knew there was a problem. He has acknowledged that as a fact. The rate of release therefore accelerated on his watch.
	I have several questions for the Minister, but first I make it clear that we on these Benches will support any action that addresses these problems effectively. If that includes new legislation, so be it, but that legislation must be thoroughly and constructively scrutinised. That is the role of this House. To be a mere rubber-stamp for executive authority would demean us all.
	The Government have said that they intend to create a presumption of deportation for foreign criminals. We support that intention. But it is right that the Government should be asked now, as they have been over the past week, why they have not properly used the powers that they already have. The 1971 Immigration Act gives the Home Secretary explicit powers to deport any non-British citizen; Section 3(5) says that he may do so,
	"if he deems deportation to be conducive to the public good".
	Why have the Government not made full and effective use of that?
	The Minister referred to the draft guidelines that will shortly be published by the Sentencing Guidelines Council, following recommendations made to it by the Sentencing Advisory Panel. However, when the Sentencing Advisory Council reported last year, it pointed out that judicial recommendations for deportation may be ignored by the Home Secretary in as many as 25 per cent of cases. What guarantee do we have that any of the changes announced by the Government today will improve the Home Secretary's rate of approval of the judge's recommendations to deport?
	I now turn to the question of the length of time that it took the Government to alert the police to this problem. The Home Secretary and his predecessors were warned several times by Her Majesty's Inspectorate of Prisons and by some police forces of the growing magnitude of the problem of foreign criminals being released rather than deported. The Home Secretary himself was warned again by the National Audit Office on 14 July last year. At least 400 foreign criminals were identified in the Home Office's first submission to the Public Accounts Committee who could have been arrested and deported.
	If the Minister can give us a good reason today why the Government were unable to act 10 months ago, the question has to be: why did the Government not act one month ago, when they had a full list available? Crucially, why did the Home Secretary tell the press about the problem before he told the police, giving more than 1,000 criminals the chance to disappear before the police could launch their attempts to catch them?
	The Government have still not given us the information that they promised us last week, which was the full number of crimes committed by the 1,023 foreign criminals since their release. When will that information be given? Moreover, the Home Secretary has not told us how many crimes were committed by the 288 criminals released after he was explicitly told about the problem. When will that information be given?
	Last Friday, the Home Secretary said in his letter to the Speaker that he considered 79 of the foreign offenders to be serious. He tells us today that deportation has been started on 70 of them, but of course only 32 of those 70 have so far been located. That is indeed troubling. The Minister says that, of the 1,023 foreign criminals who are at issue here, deportation is being pursued in 446 cases. Will the Minister tell us today how many of those 446 are now within the control of the police?
	We must now all be concerned that even this 1,000 may be just the tip of the iceberg. Almost every day that passes, we hear of a new failure. Some have been rehearsed in the press today, but I shall not ask questions on those matters for fear of falling foul of sub judice rules. Our overriding concern on these Benches is that there must be effective and appropriate management of the deportation of foreign prisoners. Revelations over the past week have put at risk public confidence in the ability of the Home Secretary to achieve that. Whatever the reasons behind the rolling rhetoric of the Home Secretary in his Statement, only one thing really matters—that the Government now get a grip on this policy issue for the safety of the public. The British public deserve nothing less.

Lord Dholakia: My Lords, I, too, thank the Minister for repeating this Statement in your Lordships' House. I listened to Prime Minister's Question Time in the other place. There is a temptation to apportion blame to one or the other party as to who should have done what and when. This Statement is far too serious and I shall avoid that temptation. The demand for the Home Secretary's resignation has been fully aired in the newspapers and in the other place. We know that there are local elections tomorrow, and public appetite will not be satisfied until a resolution is reached on this subject.
	It comes as no surprise to many of us that such a disaster was bound to come to light. We have repeatedly drawn the Government's attention to the unacceptably high number of prisoners, to the procedures that created a high backlog of asylum seekers and to immigration procedures that are easy to enact but difficult to follow up. All this has resulted in our penal institutions becoming unmanageable. Is it any surprise, therefore, that foreign nationals or British citizens feature so prominently in repeat offences? Whether or not the functions of the Home Office need to be reorganised will have to be examined at some stage. We now require urgent action to deal with violent criminals who seem to have escaped the safety net. Public confidence has been destroyed since this foreign prisoners' deportation issue came to light.
	I am therefore grateful for the Statement. We shall scrutinise the new figures with the attention that they deserve. We already know from the figures released last Friday that they beg as many questions as they provide answers. As for the announcement of new legislation for the revision of the rules, let us be clear that the present fiasco did not arise because of an absence of legislation, because of a lack of rules—an 86-page document from the Prison Service came to light yesterday, which provides policy guidance on considering the deportation of non-British offenders— or because of a lack of powers enjoyed by the Home Secretary. Indeed, the Home Secretary has very wide discretion already to remove anyone who is deemed not to be conducive to the public good.
	There is already a presumption in law that if you are convicted for an imprisonable offence you are liable for deportation. If a court recommends deportation of an offender, he or she should automatically be detained at the end of their sentence. According to the early release scheme introduced for foreign offenders, the assumption rests on automatic deportation. I ask the Minister to confirm that.
	The Government have introduced 36 new laws and 1,000 offences in the law and order area since 1997. The Minister must acknowledge that placing yet more pressure on an overburdened criminal justice system, with new rules and laws devised under the panic of the present fiasco, might prove to be little more than a cosmetic solution. We will look positively at any measures necessary to deport those who should and can be deported more quickly than at present, but not if those measures prove on further consideration to be a knee-jerk reaction to help the Government out of this self-inflicted political problem.
	Our prisons, as I said, are heavily crowded, the probation service is demoralised, the Government are at loggerheads from time to time with the judiciary and re-offending rates are now among the highest in the western world. This Government have presided over lamentably low conviction rates for some of the most serious crimes imaginable, such as rape. The Government should start getting a grip on the mismanagement of the whole criminal justice system, rather than indulging in rushing into new legislation.
	On one point I shall certainly come to the aid of the Home Secretary—on those seeking to make political capital out of the tragic case of the murder of PC Sharon Beshenivsky. That is playing a most dangerous game. The present crisis centres on the fact that hundreds of offenders have not been considered for deportation at all when they should have been. By contrast, the case of Mr Jamal, suspected of playing a part in the murder of this PC, is of a very different order, since consideration of his deportation did take place, even though we now know that the decision taken had tragic consequences. In stirring this pot, they appear to be inching perilously close to active scaremongering.
	Our focus will remain on the serial incompetence of a system in which the basic rules to examine each and every case for deportation simply were not operating at all. It is incompetence for which the Government should take political responsibility, and I note that the Home Secretary has apologised. However, he has said nothing today to restore that confidence which will come about only when the system is adequately monitored and the results of the 1,000-plus cases are known.
	We need to know at this stage where within the system we failed. What happens to those whose job it is to regulate the system? Can the Minister throw some light on that? Overall, it is a sorry state of affairs with very tragic consequences.

Lord Bassam of Brighton: My Lords, I am grateful for the thanks of the noble Baroness and the noble Lord for the Home Secretary's Statement. I am also grateful to the noble Baroness for her commitment—I think that I heard her say this—to any action to support legislation that might be necessary to ensure that the problems and difficulties with which we have been grappling can be dealt with in the future in a more accurate, targeted and functional way. I am most grateful for that support.
	The noble Baroness is, of course, right to say that we should never rubberstamp legislation and that we should properly scrutinise matters which are brought before your Lordships' House to deal with some of the profound problems that these issues involve. That is quite right and your Lordships' House has a very good record on pursuing matters in that way.
	I am also grateful to the noble Lord, Lord Dholakia, for his interest and concern, although, having heard what he said, I gained the impression that he and his party were rather less keen on supporting legislation. I believe that he argued against what he envisaged—legislation which might act as a cosmetic solution. Having heard the Home Secretary's Statement today, I should have thought that it could hardly be argued that it is full of cosmetic solutions. The Home Secretary has thought long and hard about the additional measures which may well be necessary to tackle some of the problems that this issue has highlighted. I do not think that we should underestimate the importance of that point. Of course, the noble Lord is right to say that we should not be drawn into knee-jerk reactions, but I do not think that it is accurate or fair to say that all of this is simply the product of an overworked and overcrowded prison system, because that is not the case. These problems have been around for a long time. The Government have grappled with them over that period and previous governments have had to deal with similar issues.
	The noble Baroness, Lady Anelay, as ever, was assiduous in asking her questions and I shall try to deal with some of them this afternoon. The noble Baroness quite properly asked why we had not made full use of the deportation powers contained in the Immigration Act 1971, and referred to Section 3. Successive administrations have made use of available deportation powers. The Secretary of State has discretion in considering when deportation is conducive and what grounds should be considered. In today's Statement, my right honourable friend the Home Secretary signalled his intention to seek deportation for a wider group of criminal offences. I gave details of the numbers that are currently under consideration.
	The noble Baroness also asked what guarantees there were that new powers will help convert court recommendations into actual deportations. That is a very important question. The proposals set out in the Statement will provide a better procedural and legislative framework in which to deport a higher number of people whose actions make deportation the appropriate course. That has to be right and the way forward. I am sure that the noble Baroness will want to support that.
	The noble Lord, Lord Dholakia, asked whether there was already a presumption for deportation where imprisonable offences were committed. Existing legislation provides that a court may recommend deportation where an imprisonable offence is committed. This is different from the proposal that deportations shall be the presumed outcome. I would like to see from the noble Lord and the noble Lord's Benches a signature to that new commitment of the Government, because it is an important one. We believe that presumption should be there. I hope the noble Lord's party adds its voice of support to that because that will help us to strengthen the current situation and enable us to secure support for that proposition in Parliament.
	I willingly concede that there have been errors and omissions along the way. But it would be wrong to presume that the Government do not take these matters very seriously. We do take them seriously. We have acted swiftly when these matters have been drawn through the process and when questions have been asked. A great deal of work has been undertaken; the Statement makes that clear. It is clear to me, too, that we should give all our active support and consideration to the Immigration and Nationality Directorate, the police, and also the prison and probation services, to ensure that this work is carried through and that these deportations—where they are right and proper—are given full effect.

Lord Bassam of Brighton: My Lords, I am grateful to the noble Lord, Lord Foulkes, for his intervention, because he touches on an important point. The noble Baroness, Lady Anelay, as an advocate for her party, shows great integrity and is a noble Baroness of her word. I have a great deal of respect for her. We have worked closely over a number of years to ensure the safe passage on to the statute book of many important measures. But as the noble Lord, Lord Foulkes, says, we have often brought important proposals before noble Lords, which deserve and commend the support of the House, and yet we have been turned over on these things. It has made our job in government tougher. That is precisely why I welcome what the noble Baroness, Lady Anelay, had to say, because I got the distinct impression that she would give a very fair wind indeed to practical propositions. I hope that the Front Bench opposite sticks to that. Clearly the same cannot exactly be said for the noble Lord, Lord Dholakia, and his party. They recognise the problem. Whether they will help us to grapple with the solutions remains to be seen. There is a question mark.
	I repeat what I said earlier. I do not believe that your Lordships' House should be used as a rubber stamp. It is where, quite properly, scrutiny takes place. However, it has to be accepted that there are difficult decisions to be made when you bring forward legislation and some legislation may not always seem to be the most palatable. But that legislation can be essential if we are to achieve our policy objectives.

Lord Waddington: My Lords, I hope the Minister will, on reflection, agree with me that the matter identified by the noble Lord, Lord Foulkes, is certainly not the problem with which we are faced today. Nor is this just a matter of an official failure to identify and consider for removal foreign criminals reaching the end of their sentence. The position, surely, is that under this Government there has been, to all intents and purposes, a complete collapse of immigration control. Net legal immigration now runs at well over 300,000 a year, enough to populate a new city the size of Birmingham every five years, and hundreds and hundreds of thousands of people are estimated to be here illegally. This has led to a massive increase in the number of foreigners in our gaols. If that is not the cause, what is the cause of this dramatic increase in the number of foreigners in our gaols? There are some 11,700 at present—one in eight of the entire prison population. The Prison Service and the Immigration and Nationality Directorate have simply not been able to cope. That is why we are in this position today. It is not officials who destroyed immigration control; it is this Government. It is not official incompetence, but government policy that is responsible for criminals, murderers and rapists having been released onto our streets. Unless we get some recognition of that, we are not going to get very far.

Lord Bassam of Brighton: My Lords, I am in some difficulty, because the noble Lord has not really perfected a question for me. I pay tribute to him for his work as Her Majesty's Chief Inspector of Prisons, and I am aware of his important report. I made reference in repeating the Statement to the fact that traditionally chief inspectors of prisons have drawn to the attention of the Home Secretary, as the Minister responsible, welfare issues relating to foreign prisoners. This Statement is related to welfare but concentrates mostly on improving our ability to secure deportations where people have committed serious crimes and have served a period of imprisonment that has come to a close. I am grateful to the noble Lord for his commentary. But there is nothing further I can add other than to say that I will ensure that his important remarks are forwarded to the Home Secretary in order that they can be taken account of in the round when looking at this whole policy area.

Lord Corbett of Castle Vale: My Lords, can the Minister confirm, for the benefit of the Daily Mail, that it was not because of fears for the safety of Mustaf Jama, a convicted felon wanted for his suspected involvement in the murder of WPC Beshenivsky, that he was not returned to his native Somalia, but because the militia in control of the airport had made it clear that they would fire on any plane that tried to land there? Can the Minister also confirm—I do not minimise the failures of the Home Office, as my noble friend will acknowledge—that the proportion of UK nationals convicted of very serious criminal offences who reoffend, is higher than the reoffending rate among foreign nationals who have been in our prisons?

Lord Elystan-Morgan: My Lords, within the past week or so the Home Office has stated that it is unable to set out the number of cases where there was a judicial recommendation of deportation. Will the Minister kindly confirm that this is the case and, if so, how does that come about when such data are undoubtedly collected at circuit, if not national, level? Furthermore, if it is the case that no figures for deportation recommendations are available, it would appear to be inevitable that there are no data about those cases where a judge considered deportation and specifically concluded that no such recommendation should be made. Although it may well be that the totality of these figures does not change the general situation, certainly it may mean that from that figure of 1,023 there may be hundreds of cases where there is no real and acute danger to the public.

Lord Bassam of Brighton: My Lords, the noble Lord's final statement is quite likely to be accurate. I cannot today give the noble Lord the number of cases where a judge recommended deportation. Throughout this there has been an absence of accurate data. The situation that we inherited—I do not use that inheritance as an excuse for what has happened in recent weeks—was not a happy one. No figures relating to the number of foreign national prisoners were accurately in place, as I understand it, until the late 1990s, although I have data that relate from 1997 through to the present. There has been an absence of accurate data collection and clearly we need to improve that. Some improvements have undoubtedly been made in recent years. We now have a much clearer picture of the nature of the problem and, as a consequence, some of the issues are there to be dealt with and resolved.

Lord Kinnock: My Lords, will the Minister not simply convey to his colleagues in the Home Office the importance of the views expressed by the noble Lord, Lord Ramsbotham, but also emphasise the wisdom of what the noble Lord said in 2001, as he reminded us, and the totality of his remarks, including those made today about the current Home Secretary? Secondly, does he accept that the circumstances that gave rise to this Statement make all sensible people both miserable and anxious and should propel them into seeking answers, not trying to invent slogans? Thirdly, can the Minister think of anyone who has a superior, personal strength of character or personal commitment to resolving the long-term weaknesses in the system than the current Secretary of State for Home Affairs? Fourthly, will he join me in condemning those who, in these circumstances, seek to plant and harvest public anxieties by the exaggeration of their language, regardless of which House of Parliament they happen to be in and regardless of whether they are on the streets or elsewhere, or what previously illustrious office they may have held?

Lord Bassam of Brighton: My Lords, my noble friend Lord Kinnock speaks with great wisdom. I said very clearly to the noble Lord, Lord Ramsbotham, that I would convey his comments in full to the Home Secretary because they are very important. I know that his 2001 report was received well at the time, in the sense that the issues with which he was grappling were very important. I think that measures have been fairly taken to improve the position of foreign national prisoners within the Prison Service.
	My noble friend Lord Kinnock is absolutely right to say that we should focus on solutions to the problems that have been highlighted. We do not seek to make political capital from the failures of past governments. There is no point in doing that; we have to deal with what is in front of us now. Of course, my noble friend is absolutely right to say that the Home Secretary, by the very nature of the way in which he has dealt with this, has demonstrated his integrity and commitment to ensuring that we solve the systemic problems that have been identified through some of the failures that have been revealed over the past 10 days. It is to his credit that he went public, very clearly setting out on record the nature of some of those issues.
	I am sure that all Members of your Lordships' House will want to condemn those who whip up fears and scare stories and seek to use issues like this to target and to antagonise relations with asylum seekers and quite legitimate immigrants to our country. I refer particularly to the BNP and the way in which it manipulates and twists the facts to whip up fears and anxieties against those who have only recently come to our shores.

Baroness D'Souza: My Lords, there is a need for urgent and robust action on this matter. Will the Minister also assure the House that it is precisely at times like these that one needs to maintain standards in policy and practice on deportation? The Statement mentioned failed asylum seekers and the forthcoming report from the Lords EU Home Affairs Sub-Committee. That report will be published next week and is to be called Illegal migrants: proposals for a common EU returns policy. It examines the practices in EU countries and comes up with fair, decent and effective policies and practices to deal with failed asylum seekers. The report will be debated together with the economic migrants report on Thursday 11 May and, if accepted, will provide standards to which EU countries may, in time, adhere.

Lord Davies of Oldham: My Lords, our 20 minute time is up. We have had nine speakers, which is the most we can expect to get in 20 minutes.

Lord Hunt of Wirral: We move to the position of the Counsel General in Clause 49 but, as this is my first intervention in the debates on the Bill, I will set this and subsequent amendments in context.
	As my noble friend Lord Roberts of Conwy knows, it is no secret that I argued strongly against devolution, both as Secretary of State and subsequently. I genuinely believed that my experience demonstrated that Wales was well and effectively served, in the best interests of all its people, by having full representation in the UK Government at the highest level. Since the narrow referendum result that ushered in devolution, however, we have all come to terms with the inevitable changes. In now seeking to improve the Bill, I recognise that there have been teething troubles and worse, but the principality has unquestionably recently been enjoying a tremendous renaissance.
	From the Millennium Stadium, which now seems to be hosting the FA cup final indefinitely, the Welsh National Opera and the Millennium Centre, to the fantastic new series of "Doctor Who"—filmed in Wales by BBC Wales, using Welsh talent but entrancing an entire nation—it is an exciting phase in the history of Wales. Of course, the Assembly Government cannot be cited as the single cause of all this, but they are part of this new era and have an integral role to play in the future of Wales. We must, however, be hard-headed about that future. The devolution settlement across the United Kingdom is very uneven, and it is hard to see it settling down for any length of time until all the constituent parts of the union are palpably being treated fairly.
	Aspects of each devolutionary settlement give cause for concern. I shall deal with the Ram doctrine and the royal prerogative shortly, but I turn first to the crucial question of the role of the senior law officers in the structure of government in Wales. On paper, the Counsel General is neither fish nor fowl. The role is a curious amalgam of poacher and gamekeeper, both offering friendly and courteous advice to members of the Assembly Government and watching over their shoulders to ensure that they behave themselves. I hope to hear from the Minister how he reconciles these two approaches.
	There is no mention of a Counsel General in the Government of Wales Act 1998. The role as I understand it has been to act as a senior legal adviser to the Assembly. There is obviously no objection to the position receiving statutory recognition. However, there is a markedly different system in Scotland, and there is an element of confusion about the future role of the Counsel General in Wales. The Counsel General is expressly stated to be a member of the Welsh Government. The assumption seems to be that the Counsel General will continue to act as a law officer to the Welsh Executive. Paragraph 2.9 of the White Paper states:
	"His or her principal role will be to advise the Welsh Assembly Ministers on legal matters relating to the exercise of their devolved functions".
	However, a number of specific references in the Bill confer a different role: that of initiating challenges if the Assembly or Ministers act outside their powers. These two roles may sound similar, but the duties owed in the two roles go in opposite directions. As legal adviser to Ministers, the Counsel General owes them a duty to try to keep them out of trouble. As the person responsible for initiating challenge, the Counsel General's duty is, where appropriate, to get them into trouble. It is almost the difference between prosecution and defence.
	I hope that the Minister will be able to clarify this, but whichever of the above-mentioned roles the Counsel General is to fill, and all the more so if he is to perform both at the same time, he needs to be a lawyer—I would venture to say a lawyer of considerable stature—yet there is no mention in the Bill of a need for him to have any legal qualification or experience. I hope that the Minister will comment on that aspect, too.
	It may be said that all these different roles can be combined in a person of outstanding experience, ability and integrity, and that it all depends on the quality of the individual. Perhaps so, but should the legislation not then say more about the kind of individual who might be considered suitable for the post?
	It is essential to ensure that the appointment process is transparent and that the individual appointed possesses, and is seen to possess, independence as well as impartiality and integrity. I beg to move.

Lord Elystan-Morgan: I have some sympathy with the amendments proposed. The office of Counsel General has suffered a sea change within the past few years. When the Assembly was first created, the role of the Counsel General could probably have been said to be akin to that of a conscientious clerk to a county council in the old days when such a clerk was a lawyer and intended to act as the solicitor, as it were, for that body. With the development of the Assembly, and particularly with the developments enshrined in the Bill, it is entirely proper that the role of the Counsel General should be regarded as more comparable with the role of an Attorney-General than with that of a clerk to a county council.
	I agree completely with what has been said: it is essential that the Counsel General is a person of the highest legal standing and, indeed, of considerable experience. I do not comment on what the noble Lord, Lord Carlile, said about the difficulties relating to appointment. I have shared chambers with both Mr Roddick, whom I regard as a person of the highest distinction, and Mr Elias—the candidate whose candidature caused such controversy—again, a person of the utmost probity and the first rank of legal experience and expertise.
	Nevertheless, if the role is to be comparable with that of an Attorney-General, one may very well have to accept that it is a quasi-legal appointment. That does not damn that appointment for all time. Attorneys-General perform two roles: they are members of a government and political creatures, but they also exercise quasi-judicial functions. I believe that in all parties over the last 100 years one has found, almost invariably, an adherence to such standards. I had the very splendid experience in this Chamber of being an understudy to the late Lord Elwyn-Jones. I cannot imagine anybody who so portrayed those qualities of judicial independence as well as he did. I would accept, therefore, that the development of the Assembly justifies a change in the role of the Counsel General. It is inevitable that there should be some prospect of that person being a political appointment. I am not entirely happy with the idea that he should be a Minister; I would prefer him to be independent of that system.
	However, I doubt very much whether one can have it both ways. One has to accept, therefore, his political involvement. What I unfortunately do not accept is that there should be consultation with the Attorney-General before an appointment is made. The Assembly is given great powers and much trust is to be invested in it. It would be insulting and wholly unnecessary for there to be a necessity for that consultation.

Lord Evans of Temple Guiting: I begin by warmly welcoming the noble Lord, Lord Hunt of Wirral, to our discussions. Several issues have been raised that are very interesting and, to be absolutely frank, completely new to me. We will read and reflect on the comments of noble Lords, particularly those of the noble Lord, Lord Carlile of Berriew, and do whatever needs to be done.
	As we have heard, Amendment No. 42 seeks to ensure that the Attorney-General is consulted on the appointment of the Counsel General. It also places a condition on the recruitment of the Counsel General to ensure that the office-holder must have been either a member of the Bar or a solicitor of the Supreme Court for at least 10 years. The recommendation for the appointment of the Counsel General is properly a matter for the Welsh Assembly Government, with the approval of the Assembly. The Government do not agree with the noble Lord, Lord Elystan-Morgan, and my noble friend Lord Richard that the Attorney-General should be consulted on the appointment.
	The Counsel General will be a member of, and the legal adviser to, the Welsh Assembly Government. He or she will be their representative in the courts and, in this capacity, the Counsel General and the Attorney-General could conceivably find themselves representing opposite sides of a devolution issue. We believe that the limitations which the noble Lord seeks to place on the criteria for the selection of the office-holder are too restrictive. Given the nature of the office of Counsel General, it is inconceivable that the First Minister would recommend for appointment a person who did not have a high degree of legal expertise and experience. To impose a specific set of qualifications would be unnecessary and an undue constraint on the First Minister's discretion. What if the best candidate had nine years' experience rather than 10? Furthermore, very specific levels of legal qualification, which may be appropriate for a member of the judiciary, are not necessarily so appropriate for someone who will be a member of the Welsh Assembly Government as well as their legal adviser. The First Minister may wish to take other experience into account, such as experience in constitutional matters generally.
	As laid out in the Bill, the appointment will be made by Her Majesty on the recommendation of the First Minister. However, the First Minister must have the Assembly's agreement to the recommendation. The role of the Counsel General has no effect on the role or status of the UK law officers who were consulted on the drafting of the Bill. It might be helpful if I place on record exactly what the Counsel General's role will be—to provide authoritative legal advice to the Welsh Assembly Government; to represent the Welsh Assembly Government in the courts generally; to institute proceedings for the determination of devolution issues and to defend any such proceedings instituted by the Attorney-General; to receive notice of cases involving devolution issues; to monitor proposed Assembly measures and, following a yes vote in a referendum, Assembly Bills for compliance with legislative competence; to refer doubtful cases to the Supreme Court, when it is established, but to the Judicial Committee of the Privy Council in the meantime; and to meet UK law officers and law officers of the other devolved Administrations.
	I hope that, with that explanation, the noble Lord will feel able to withdraw his amendment.

Lord Hunt of Wirral: This has been an interesting debate. I am particularly grateful to the noble Lords, Lord Thomas of Gresford and Lord Carlile, for filling in a bit of the political background and stressing the points which were aired early in this debate. I found the advice of the noble Lord, Lord Richard, very useful in setting some of the background and the role that he sees the Counsel General playing, as was the insight and knowledge of the legal profession in Wales given by the noble Lord, Lord Elystan-Morgan.
	I am grateful to the Minister for agreeing to ponder some of the points, notably those made by the noble Lord, Lord Carlile. I am still unsure how this role will proceed, particularly as regards challenges. I recognise that one could find the Counsel General on one side and the Attorney-General on the other. I should like to reflect on some of the points made by the Minister. In particular, I am grateful to him for setting out in such detail the role of the Counsel General and the functions that he will perform. Against that background, this has been a useful discussion. My noble friend and I would like to consider carefully the points made by Members of the Committee. In the meantime, I beg leave to withdraw the amendment.

Lord Roberts of Conwy: The amendment is self-explanatory. It seeks to limit the number of Welsh Ministers to eight and the number of Deputy Welsh Ministers to three, rather than the current provision to limit the total number of both posts to 12. It is a minor change and a probing new clause. I also seek to probe various issues relating to this provision.
	There are many reasons in favour of a limitation on the number of Ministers, not least the example of what has happened in Scotland. The number of Scottish Ministers has exploded from the original five to the current 22. I know that the responsibilities of the Scottish Parliament are considerably more extensive than those of the Welsh Assembly. Nevertheless, 22 Ministers is substantial. It might be described as a kind of overgrowth. It has obviously led to increased cost and complexity for possibly questionable benefit. In Wales, with its Assembly membership confined to 60, an inappropriately large number of Ministers and Deputy Ministers would, I think we would all agree, also reduce the number of Welsh Assembly Members available to hold those Ministers to account.
	I am glad to see that this Bill does not repeat the mistake made in the Scottish Act of placing no limit on the number of Ministers. As it is obviously so much harder to reduce the number of Ministers once they have been appointed rather than prevent them applying in the first place, it is sensible to have that limiting provision from the start.
	The current provision makes no distinction between Ministers and Deputy Ministers, which is necessary given that there is some confusion over the precise role of the new deputies. Perhaps the Minister would like to take this opportunity to explain exactly what need he envisages Deputy Ministers fulfilling. What is to be their role? Are they the equivalent of Ministers of State or Under-Secretaries of State in the United Kingdom Government? In addition, how will the National Assembly cope with the increased workload that will result from the implementation of Part 3 and especially Part 4?
	We have heard in the other place that the Assembly will sit for more weeks and more hours in the week and that that should allow Assembly Members adequately to scrutinise the legislation and perform their functions. If the Minister has views to express on the new Assembly and its workload, we would be grateful to hear them. I beg to move.

Lord Evans of Temple Guiting: As we have heard, Amendment No. 43 would limit the number of Ministers to eight and Deputy Ministers to three. The Government agree that a limit is important to the effective function of the Assembly and that there should be a limit on the size of the payroll vote. The Bill sets a statutory limit in Clause 51 so there is no danger of the sort of explosion mentioned by the noble Lord, Lord Roberts, that has happened in Scotland. We agree with the noble Lord, Lord Livsey, that the amendment is too restrictive. We do not believe that the limit on the number of Ministers and Deputy Ministers needs to be reduced. Moreover, the Government believe that it is not necessary to limit the First Minister's discretion over the balance of Ministers and Deputy Ministers.
	The limit prescribed in the Bill—a combined total of no more than 12 Welsh Ministers and Deputy Welsh Ministers—is consistent with the current situation. There are currently eight Cabinet Ministers in addition to the First Minister, and four Deputy Ministers.
	In the House of Commons, there are currently 89 Ministers, including Whips, and 51 Parliamentary Private Secretaries. This represents around 21.7 per cent of the total membership of the Commons. The limit that we have proposed for the Assembly, taken together with the First Minister and the Counsel General, represents only a fractionally greater proportion of the Assembly if the Counsel General is also an Assembly Member, and a smaller proportion than in the House of Commons if the Counsel General is not.
	The Assembly will also have powers over Welsh Ministers' and Deputy Welsh Ministers' salaries by virtue of Clause 53, should there be any concern about the size of the payroll. Furthermore, I draw the attention of the House to the fact that in the Assembly Committee's consideration of the Bill, the only suggested amendment to this clause, which was subsequently withdrawn, sought to set limits of eight Ministers and five deputies.
	The noble Lord, Lord Roberts of Conwy, raised the question of the workload of the Assembly in relation to the number of Ministers. As I believe I pointed out previously, to ensure adequate scrutiny there is considerable scope for the Assembly to adapt its working practices and to spend less time on routine subordinate legislation. The Presiding Officer, the noble Lord, Lord Dafydd Elis-Thomas, agrees and has said that the timetable should increase from 33 to a minimum of 40 weeks a year and that Monday and Thursday mornings should become part of the Assembly's working week. In an interview he said:
	"I agree with the Secretary of State, we all have to work harder here. There should be three to four days of proper scrutiny . . . We should sit for at least 40 weeks a year . . . We finished for Christmas at least a fortnight before Parliament".
	With that explanation, I hope that the noble Lord will feel able to withdraw his amendment.

Lord Roberts of Conwy: I am grateful to the Minister for his reply and the other comments made in this brief probing debate. I must say to the noble Lord, Lord Livsey, that my mind goes back to the time when only three Ministers looked after the Wales Office and it was managed. We expect that many of the 20 or so spheres that he mentioned will be combined as responsibilities for Ministers. Nevertheless, the difference between the new clause and Clause 51 is minor, as I pointed out. We are glad that there will be a limit in the Bill on the number of Ministers, and also to hear repeated what was said by the Presiding Officer of the Assembly and endorsed by the Government: that the Assembly sittings and number of working days would be extended to cope with its new responsibilities, which, after the passage of the Bill, will be substantially different from the work of the old Assembly, with far more emphasis on holding Ministers to account. I beg leave to withdraw the amendment.

Lord Hunt of Wirral: I thank the Minister for his kind welcome earlier today. I wish to turn for a few moments to the Ram doctrine. As I understand it, the doctrine is set out in a memorandum, dated 2 November 1945, from the then First Parliamentary Counsel, Granville Ram. It states that a Minister of the Crown may exercise any powers that the Crown has power to exercise, except in so far as the Minister is precluded by statute from so doing, either expressly or by necessary implication. But I do not think Ministers can pray that doctrine in aid when they argue against these small amendments.
	Amendment No. 44 would insert into Clause 60 the words "within their powers", so subsection (1) would read:
	"The Welsh Ministers may do anything within their powers which they consider appropriate".
	Under the Royal prerogative, discretionary ministerial powers are held to exist except where they are curtailed or curbed by statute. As they stand at present, however, Clauses 60 and 70 stand to create worryingly wide-ranging and open-ended powers for Ministers. We should think once, twice or perhaps even a thousand times before giving anyone in any circumstances the power to quote Clause 60 to do anything.
	I was interested to hear my noble friend talking abut the number of Ministers. I recall the time when I was privileged to work with him in the Wales Office; he seemed to perform the duties of at least 10 or 12 Ministers. Therefore, he is somebody one would trust always to exercise those powers very carefully indeed. But I do not think he ever sought the sort of wide discretion in Wales currently afforded by Clause 60. I hope the Minister will think carefully about what are reasonably minor amendments but which will set in context how Ministers can exercise their powers.
	Just as citizens are free to do anything that is not illegal, so Ministers are generally empowered to do anything which does not conflict with statute. The same is held to be true of Ministers in the Welsh Assembly, which is why it is not only right but essential to qualify the powers created in these two clauses.
	The later amendment, Amendment No. 48, would insert, in page 38, the word "reasonable". Therefore, under the heading "Financial assistance" in Clause 70, subsection (1) would read:
	"The Welsh Ministers may give financial assistance . . . to any person engaged in any activity which the Welsh Ministers consider will secure, or help to secure, the attainment of any [reasonable] objective which they aim to attain in the exercise of any of their functions".
	That would be a good reassurance. In an ideal world or one based upon that hoary doctrine of subsidiarity, power would invariably be passed upwards rather than delegated downwards. But we do not live in an ideal world and that is simply not a practicable system. The fact is that the Welsh Assembly and the Assembly Government or Senedd are all created under an Act of Parliament. It falls to us as parliamentarians to establish precisely what their role and functions are to be and where their powers begin and end.
	Of course these clauses are not a recipe for despotism, although in a different context some might put that construction on their terminology. However, unamended and unqualified, they may well be a recipe for chaos and confrontation. They are ambiguous and seemingly open-ended, and they could so easily be improved if Ministers were minded to accept these small but reassuring amendments. The amendments are in no sense wrecking. It could even be argued that they do no more than make explicit what is already very much the moving spirit behind the clauses. I beg to move.

Lord Temple-Morris: I say at the outset that I have a presence here which needs to be explained in that after nearly 28 years in another place, representing an English constituency, very few people tend to remember—although I am sure that most Members of the Committee are aware of what I am about to say—that I come from Wales, I am proud to say. I come from Cardiff and, indeed, Wales is very much the land of my fathers and of my grandfathers. Over the years I have retained many contacts in Wales, most particularly in the arts sector, which is why I have tabled this amendment.
	I have a considerable concern—which I hope is shared by Members of the Committee—that we get devolution right. I say that having been very much in favour of devolution. Indeed, I was publicly in favour of it when I was still a Conservative and devolution was not a policy of that party. There is a very real danger here. Some Members of the Committee may consider that the sequence which I shall outline in a moment is an example of that. After a long period of English dominance over Welsh institutions, there is a danger of overdoing it and of clutching unto oneself all the power that one can—a sort of devolutionary aspect of the "We are the masters now" syndrome.
	I also have a very real concern about the merits of the issue. I make it clear at the outset that we are after the best and most effective governance of the arts in Wales and the maintenance of the arm's-length principle which has been with us since 1945, and was introduced by Jennie Lee herself. There is absolutely no argument about the desirability of increasing attendance and participation of disadvantaged groups in the arts within Arts Council of Wales circles or, indeed, anywhere else. Indeed, the excellent record of the Arts Council of Wales in that regard should be referred to. I mention in particular the charity, Youth Music, a creation of the Arts Council of England, but which, to my knowledge, has done excellent work in Wales. It was introduced under the present Government very much with those objectives in mind but is administered mainly by itself under the guidance of the Arts Council and the supervisory role of central government.
	These issues, and the background to them, need to be put firmly on the record as the Bill goes through this House and the Government should have the opportunity to comment on and to justify their stance. I have tabled the amendment in no party political spirit. I want my noble friends and Members on all sides of the Committee to realise that. We are dealing here with the governance of the arts. We are effectively granting powers to one part of the United Kingdom; namely, Wales, that are not so exercised in England. I say by way of illustration that I would be horrified if, for example, the National Theatre, of which I am a fairly frequent patron, was to come under the direct control of any government department, however benevolent that control seemed to be when it was introduced. I believe that Jennie Lee would agree with me, were she here today.
	I now come to the background to these matters, which it is very important to set out. Section 28 of the Government of Wales Act 1998 gave the Assembly the power to change or abolish a range of public bodies in Wales. These were listed in Schedule 4 to the 1998 Act, which introduced devolution to Wales. The schedule divided the public bodies into four categories—Parts I to IV. The Arts Council of Wales, the Sports Council for Wales, the National Museum of Wales, the National Library of Wales and the Royal Commission on Ancient and Historical Monuments of Wales are listed under Part IV. Bodies created—this is an important point—by Royal Charter or warrant were all included in Part IV. Under Section 28 of the 1998 Act, the Assembly was debarred from removing any function from a body listed in Part IV unless it was done with the consent of that body. It could not even add a function without that body's consent. The clear motive was to protect the status quo as far as those bodies were concerned. It was, in effect, the statutory embodiment of the arm's-length principle.
	That was confirmed with a number of references leading up to the 1998 Act, which should be referred to. Before the present Government came to power in 1997, a Welsh Labour Party document—a good document—was published in 1996. The document, Preparing a New Wales, said:
	"Bodies established by Royal Charter or by warrant, under the Royal Prerogative such as the National Museum of Wales, the Arts Council of Wales and the Royal Commission for Ancient and Historical Monuments in Wales will continue to be responsible for their existing activities.
	The Assembly will take over the role and responsibilities of the Secretary of State"—
	in other words, of central Government—
	"with regard to these bodies, and will ensure openness and public accountability in their activities".
	All is well and good with that, I am sure most of your Lordships will agree. There then comes, after the accession into power of the Labour Government, a government White Paper in 1997, leading up to the 1997 referendum. It was called A Voice for Wales. It made quite clear that:
	"The Assembly's powers to restructure bodies will not apply to those which, firstly, operate at arm's length from Government, specially to guarantee the independence of their decisions; and secondly, were created by Royal Charter or Warrant (such as the National Library of Wales). Such bodies are governed by their Charters or Warrants, and these can only be amended by Her Majesty's agreement".
	Finally, we come to the debate on the Government of Wales Bill in 1998, in Parliament. During the passage of the Bill in another place, Peter Hain, now Secretary of State for Wales, and for whom I have the highest personal regard, then Parliamentary Secretary at the Welsh Office, said:
	"Under Clause 29"—
	which became the Section 28 that I have already mentioned—
	"we have made it clear that royal charter bodies can only gain functions; they cannot be taken away".—[Official Report, Commons, 25/2/98; col. 466.]
	Mr Hain had earlier said:
	"The assembly has the ability to leave only 16 quangos in existence, if it so chooses. That amounts to a bonfire of the quangos, which we lit with the Bill, and we have complied with our commitments in the White Paper".
	This so-called "bonfire of the quangos" is an important part of the background to this, because the Under-Secretary, Mr Hain, then goes on:
	"Why did we not abolish all the bodies? That brings me directly to the Arts Council of Wales and the Sports Council for Wales. They together with the other three bodies—the National Library of Wales, the National Museum of Wales and the Royal Commission on Ancient and Historical Monuments of Wales—are all bodies created by charter or royal warrant.
	Unless the Conservative Opposition have suddenly become a republican Opposition, surely they would agree with me that it is for Her Majesty to agree changes to those bodies. It is not appropriate to amend them by means of a Bill".—[Official Report, Commons, 25/2/98; col. 462.]
	We then come to the actions of the Welsh Assembly. I will deal with this as succinctly as I can—it is the recent history of this matter. As part of the Assembly Government's review of Assembly-sponsored public bodies in 2004, only two years ago, they decided to circumvent that protection of the status quo in the case of the Arts Council of Wales, by seeking to use Section 32 of the 1998 Act—to circumvent therefore the Section 28 that I have mentioned by use of Section 32 of the 1998 Act—which is the equivalent of the Clause 61 that I seek to amend. Section 32 of the 1998 Act gave the Assembly a general power to do anything appropriate to support the arts. They intended to use this section to allow them to transfer responsibility for six large arts organisations, from the Arts Council of Wales to the Assembly Government's culture department, thus making them direct clients of government. That was, of course, the direct subject of a defeat in the Welsh Assembly, which I will refer to in a moment. That was the intention; it has now been, for the moment at least, thwarted by that defeat.
	The companies were—for the record I have to mention them, but they are all the largest clients of the Arts Council of Wales—the Welsh National Opera; the BBC National Orchestra of Wales; the Clwyd Theatr Cymru; the Welsh Language National Theatre Company; the Diversions dance company; and the Academi, which is a literature promotion agency for Wales and a representative organisation for Welsh writers in both languages. Their combined annual grants were at the time equivalent to no less than 43 per cent of the total Arts Council of Wales grant in aid. If that is not a form of emasculation, I do not quite know what is.
	The Assembly Government also sought to transfer—I say "sought to" because for the moment it has not been able to take effect—or the actual words were to "bring together", the strategic planning functions of the council to the department responsible for culture. In relation to the Arts Council, the Assembly Government challenged the arm's-length principle that has governed the relationship between government and the arts since the creation of the Arts Council of Great Britain in 1945. There had been—and this is not unimportant—no prior consultation on these important proposals. The Arts Council of Wales opposed the change, but proposed a compromise solution that the Minister for Culture, Welsh Language and Sport rejected. It became a matter of public debate—which I remember going on at the time as I was following it quite closely—in which the arts sector gave overwhelming support to the Arts Council's position.
	The matter was pressed eventually to a vote in the Assembly in the plenary session on 1 February 2006, and the opposition parties combined to defeat the Assembly Government by one vote. The resolution that was carried instructed the Assembly Government to halt all preparations to transfer responsibility for the six large arts operations until a public review and consultation with all stakeholders was carried out and a further Motion brought to the Assembly in December 2006. We are well ahead of that for the moment. That committee is now in active session. The terms of reference for the review were agreed, and they were extensive. It is being conducted by a panel of six people under the chairmanship of Elan Closs Stephens, the former chairman of S4C. They are all very distinguished people in their own right. It is fair to say that this clause is running ahead of any conclusion that that committee might reach. That is an important point.
	I have already mentioned a couple of relevant issues of concern. First, under the current Act an Assembly Member would not be able to abolish the Arts Council of Wales without persuading the Secretary of State for Wales—in other words a Cabinet Minister in central government—to petition the Privy Council to that effect. Under the new Bill, Welsh Ministers are themselves Ministers of the Crown and would be able to petition the Privy Council directly for changes to or abolition of the Arts Council, or the National Museum of Wales, or any of the other bodies. The protection given by the arm's-length principle is therefore considerably less than the 1998 Act. It goes around the safety valve of the Secretary of State.
	The second item of immediate concern is Clause 61, which seeks to replicate the effect of Section 32 of the 1998 Act, which I have already mentioned, by giving Welsh Ministers the general power to,
	"do anything which they consider appropriate to support",
	arts, crafts, cultural activities, projects and so on. Given the uncertainty about the use to which Section 32 of the 1998 Act was put, there is a strong case for clarifying the issue in the Bill. Speaking now with a legal hat on, there could be a considerable legal argument here as to whether the action of using Section 32 against Section 28 was legitimate and not perhaps ultra vires, but that has never been heard legally. The sweeping powers that we are giving in Clause 61 in advance of the proceedings of the committee that I have mentioned need to be justified by central government. It is for your Lordships' House, the other place and central Government in taking through this Bill to act in the necessary supervisory way that is merited in this case. I want to re-emphasise that there is an active committee set up to consider this matter because of an Assembly defeat.
	My amendment limits what I have described as fairly sweeping powers to support the arts. I hope it clarifies the matter, but such a clarification is not intended to subvert the primary intention of this Bill, which grants the Assembly and its Government a much wider degree of competence. That is all well and good. It introduces a check and balance to ensure that if or when changes are made to these Royal Charter bodies, they will be made by reference to the Privy Council, after full consideration and debate by all parties in Wales, and not by administrative action alone, which is what Clause 61 amounts to.
	I now want to sum up the position. I believe that this whole process has been unsatisfactory. There has been no proper consultation with the Arts Council; there has been no proper consultation with anybody else. The former chairman of the Arts Council, who was obliged to leave office on 31 March 2006, was—shall we say—at least constructively, or summarily, dismissed on 23 December 2005. He was a person of very high status and renown in the Welsh arts, and indeed generally. The Arts Council of Wales was united in his defence and against these proposals. There had effectively been no consultation about them. There was also widespread public feeling against the Assembly Government over this, which has done my own party's government considerable harm. It went well beyond the Welsh arts world, leading to the defeat in the Assembly on 1 February 2006.
	There is a basic unsuitability in these six bodies being brought into the Government's culture department. There has been talk in Wales of parallels with the Soviet Union and eastern Europe before the Berlin Wall came down. That is a gross exaggeration and I want to make it clear that in moving this amendment I do not doubt the good intentions of the Assembly Government. It is not their integrity that is at stake here, but the good governance of the arts in the longer term. There are many people here who know Wales as well as—or better than—me, including a number who have helped to administer it. Wales is a small place. It is certainly a place where, in its establishment, and indeed generally, everyone knows everyone. In such a small place, a scenario where too much power is put in one place will inevitably lead to a sense of obligation and a general unwillingness to displease that source of power. The effect of that is possibly, or even probably, insidious.
	I shall give a couple of examples. Theatres should not be direct clients of government; nor should the BBC National Orchestra of Wales. There is an obvious clash of interest here. The BBC, and not just in Wales, is frequently out of sync with the government of the day. By putting a very important instrument of BBC Wales under the control of the government of Wales, there is a conflict. It should not be a direct client of that government. Finally, Academi gives grants to and represents writers; it should not be a direct client of government.
	This is an important amendment. It raises important principles of democratic government and of devolution. Central government and this House have a responsibility to consider it very carefully. In that context, I look forward to my noble friend's reply.

Lord Crickhowell: The noble Lord has rendered the Committee and the people of Wales a very considerable service by tabling this amendment and by setting out the arguments so fully. Previously in Committee, I touched much more briefly on the issue. I referred then to the way in which Mr Geraint Talfan Davies had been treated. Apparently, he was dismissed largely because he represented the views of the council of which he was chairman in opposing the decision taken by Mr Pugh, the Minister with responsibility for these matters within the Assembly. I understand he was also criticised for the fact that the Minister did not consider that the Arts Council had been doing enough to ensure the attendance and participation of all sections of the population, a matter referred to by the noble Lord. The evidence on which that charge was based was a survey carried out by the Arts Council of Wales, expressly at the instigation of Mr Geraint Talfan Davies, its chairman. So it was a particularly strange argument to advance for getting rid of him.
	Incidentally, Mr Geraint Talfan Davies, when chairman of Welsh National Opera, played a leading role in extending, by a very considerable extent, the activities of Welsh National Opera in exactly that field, in schools and local communities, for which it is now very well known.
	I suppose I should declare an interest in that for half a century or so my father served on the Court Council and Arts Committee at the National Museum and my brother was president of the National Museum and Galleries at the time of his death. My wife also served for many years on the Arts Council of Wales and in another capacity was responsible for introducing into Wales that admirable charity, founded by Lord Menuhin as he became—Yehudi Menuhin—Live Music Now, which has probably done more to take music to places and to people who would not otherwise hear it in Wales than any other organisation.
	I speak with particular feeling about these issues. I can speak too as having been known, as Secretary of State, for the enthusiasm with which I funded the arts and having launched the great new building in the heart of the National Museum of Wales, which now houses the Davies Bequest. That work was carried on by my noble friend Lord Walker, who I am glad to see in his place, and by the noble Lord, Lord Hunt, who played a leading role in extending arts activities into the valleys as part of the valleys initiative.
	With that background of taking a keen interest in the arts and arts matters, I support every single word uttered by the noble Lord. I looked at this clause with considerable concern when I saw this apparently very extensive power that could be applied, not only, incidentally, to the public bodies to which he referred, but also to other bodies, such as the National Trust, on which one would like a little elaboration. After all, the National Trust has responsibility for buildings and places of historical or architectural interest in Wales and there are other obvious organisations that might be affected by these powers.
	I am firmly of the view that the arm's-length principle is an important one. To bring together the funding of these six bodies in this way, so that such a large part of the finance going to arts organisations in Wales comes from a single source—a single Minister—has dangers. The noble Lord spoke of them in very cautious and reasonable terms. I shall certainly not suggest for one moment that the example of Soviet Russia will be followed. He was quite right to dismiss that allegation. However, there are real threats. If all the arts organisations, covering theatre, writing and every form of the performing arts, are funded from a single source, people will feel under obligations. They may feel that they have to listen to suggestions put to them, however discreetly, about the way in which they operate and the kind of performances that they put on or should not put on. It is no defence to say, "Ah well, it will all come under the general supervision of the Assembly" if the Minister is perhaps answerable to a party with a substantial majority in the Assembly. If only to get rid of any suggestion that undue influence is being exerted in this way, one should have the arm's-length principle as a protection.
	As the noble Lord, Lord Temple-Morris, told the Committee, Mr Pugh and the Welsh Assembly Government sought to circumvent the limitations of Section 28 by looking to Section 32 of the 1998 Act. Those are exactly the powers that we are now considering. So surely it is right that, if protection should be specifically written into the legislation to ensure that charter bodies are not taken over in this way, there should be no doubts allowed in another clause that might be used to overrule it.
	We must recognise that we are dealing with bodies with a well deserved reputation. For many years, organisations such as the National Library of Wales and the National Museums and Galleries of Wales have built up their reputation because they have been governed by people with a huge range of scholarly expertise and management skills. They hold a high reputation today because of that. Of course, Welsh National Opera has an international reputation in its field. We are dealing with bodies that cannot be under threat—if that is the right word—from interference by Ministers because they fail to perform. Many of them have performed outstandingly well.
	I therefore hope that the Minister will either accept the amendment of the noble Lord, Lord Temple-Morris, which would be the best way out, or at least give us assurances satisfying us that the powers in this clause could not be misapplied in the way described by the noble Lord, and which were attempted under the previous Act. I hope that the Minister will take his noble friend's amendment extremely seriously. That is what it deserves.

Lord Livsey of Talgarth: I declare some interests. I am a former chairman of the Brecon jazz festival, vice-president of the Hay festival of literature—which, with the Florence family, we founded to great success—and my daughter is an actor who performs regularly in Clywd Theatr Cymru and on S4C, so I must be careful what I say.
	However, I fully support the amendment of the noble Lord, Lord Temple-Morris. He may be surprised to hear this, as I am an ardent devolutionist. I also support what the noble Lord, Lord Crickhowell, who has done a tremendous amount of work for opera in Wales, has said. We have all benefited from the previous status of the Arts Council of Wales, which has performed remarkably well. It went through a rough patch about five years ago but, other than that, it has done a very good job indeed.
	I am not a lawyer, but I tend to agree with interpretation of the noble Lord, Lord Temple-Morris, that, in a legal sense, the Arts Council does not have quite the same status as what would be called a quango. Indeed, when a previous Secretary of State, Ron Davies, said that he was going to have a "bonfire of the quangos", I do not think he was referring to the Arts Council or the Sports Council, because they have a different status.
	All that needs to be said has been said. I do not want to delay the Committee too long with these matters, but there is undoubtedly a case for such bodies, which stem from a Royal Charter and which are at arm's length, retaining their status because they should not be the subject of huge political controversy. They should continue to produce excellence for Wales. As we have heard today, they do a very good job.
	The noble Lord, Lord Temple-Morris, was correct to refer to Sections 28 and 32 of the Government of Wales Act 1998. It seems extraordinary that Section 28 debarred the Assembly from removing any function from a body listed in Part 4 unless it was with the consent of that body, yet Section 32 has been used to cause the present, enormous hiatus in the construction of the arts in Wales.
	I am pleased that Elan Closs Stephens and her committee are to look at the overall situation. The people on that committee are wise and they look as though they will come to a sensible conclusion. I hope that the same wisdom will apply in the Assembly, but we are on dangerous ground here—I speak as an ardent devolutionist—because this is a matter for the Assembly. None the less, the Government of Wales Act 1998 took account of these bodies which were formed under Royal Charter. I give way to the noble Lord, Lord Rowlands.

Lord Roberts of Conwy: I shall be very brief. I think that I speak for all sides of the Committee when I thank the noble Lord, Lord Temple-Morris, for his extensive, but necessary, introduction to the amendment. He rightly drew attention to the bonfire of the quangos that was lit by Assembly Government in Wales. Various bodies were tied to the stake, as it were, including the Welsh Arts Council. We also heard on the first day of this Committee about the impending fate of the Welsh Language Board, which is another quango threatened with burning.
	The impression has been given that the decision was taken without full consideration of the feasibility or the consequences. It was automatically assumed that getting rid of the quangos was a good thing and could be only beneficial. Gradually, people have come to realise that the quangos served a useful purpose and had many high achievements to their credit.
	In The Times of June 15 last year, Magnus Linklater described the situation in Wales as he understood it. He wrote then—I stress that it was June of last year:
	"In Wales, where the Assembly has moved to take over arts funding, there is a dawning realisation that the much maligned Arts Council may, after all, be the best body to take these tricky decisions".
	He was referring to the allocation of funds to different organisations. He went on to write:
	"I know of no European country that does not have some form of semi-independent organisation to manage its arts policy".
	So it seems on the face of it that the Assembly Government have committed an error of judgment and would be well advised to revise their thinking.

Lord Richard: What the noble Lord said is important. He said that the Assembly seems to have made an error of judgment. That may or may not be right, but the question is whether this House should prevent the Assembly exercising that judgment. That is the real point of this debate, not whether it got it right or wrong, but whether the Bill should prevent it going through that exercise. But I interrupted; I had better not make a speech.

Lord Evans of Temple Guiting: I was going to come on to the matter but, as the noble Lord, Lord Crickhowell, has raised it, I will deal with it now. Section 28 of the Government of Wales Act 1998 has not been repeated in the Bill, but it has not been repealed either. That will give noble Lords something to ponder on while I continue.
	The amendment seeks to restrict the ability of Welsh Ministers to support any cultural or other activity referred to in Clause 61, cutting right across the functions and activities of all relevant charter or warrant bodies in Wales. To give effect to such an intention would impede the proper business of the Welsh Assembly Government and make it impossible for Welsh Ministers to provide, for example, financial support for major events or for institutions such as the Wales Millennium Centre. That would not be an acceptable proposition.
	It is absolutely clear that things have happened in the Assembly, particularly in relation to the Arts Council, that have caused great controversy. However, I agree with my noble friend Lord Richard: if there are issues that Members of the Assembly might learn from, so be it, but it is not for us in this Chamber to debate and to legislate on this matter. It is for the Assembly Government to decide and for the Assembly to scrutinise.
	We are not here to restrict the Welsh Assembly Government if we do not agree with their policy, but to ensure that the role of the Assembly is clarified and to enhance its ability to scrutinise policies such as this. This Bill—this is a fundamental point—is not the right vehicle for the noble Lord's concerns. This has been a very interesting debate, particularly for those of us who have spent a great deal of time working in the arts world. I am sure that what we have said and debated will be read with considerable interest by many people in Wales.

Lord Elystan-Morgan: Will the noble Lord reflect on the fact that an address given on the very same occasion on behalf of the Speaker of the House of Commons, who could not attend as he was indisposed—it was a carefully crafted and measured declaration, read out by the Deputy Speaker—referred to the Welsh body as a sister Parliament.

Baroness Finlay of Llandaff: I am grateful to the noble Lord for having read out the relevant part of the letter from Jane Hutt on the amendment, because in principle I support the thoughts behind the amendment. Indeed, the spirit of co-operation is enormous and the contribution of the voluntary sector is huge. I must declare an interest, working in the hospice sector, but I also sound a little warning that if we are not careful to ensure that there really is a good mechanism for the Assembly and the voluntary sector—I personally would like to see something in the Bill—there is a danger of different parts of the voluntary sector going and doing their own thing. Some parts of the voluntary sector are driven by powerful personalities with enormous energy that can be harnessed for the public good, but, unfortunately, when they compete for funds they can have a tendency to compete directly with a similar provider adjacent to them, which can create local friction.
	The Assembly has done an astoundingly good job at harnessing the energy of all the voluntary sector providers. I want to make sure that that is not lost. While the wording of the amendment may not be perfect, I hope that the Minister will agree to consider the principle behind it to ensure that what has been achieved is not lost as the Bill passes.

Lord Livsey of Talgarth: I am sure that this is the right moment to congratulate all those involved in the voluntary sector in Wales. They do a fantastic job, often with few resources. I am involved with about 10. I will not list them, but it is important that they receive maximum support. I support the amendment and the sentiment behind it, particularly the point made by the noble Baroness, Lady Finlay, that an overarching co-ordinating strategy that does not cause duplication of effort is needed. The Minister would be advised to consider that point and discuss with the Assembly Members what they are going to do in this situation. Proposed new subsection (2) of Amendment No. 50 refers to:
	"(a) the Welsh Ministers,
	(b) the Deputy Welsh Ministers, and
	(c) at least eleven Assembly members reflecting party balance".
	I wonder whether there will be a proper party balance in the circumstances. I say no more than that.
	I congratulate the Wales Council for Voluntary Action (WCVA), which does some very good work, including work with co-operatives. It has some good staff and good co-ordinating skills. In principle, we support the idea but we certainly do not want to be too prescriptive to the Assembly. None the less, a body is needed to co-ordinate matters in Wales and the voluntary sector.

Lord Brooke of Sutton Mandeville: These are the first words that I will utter on the Bill. They will be extremely brief and modest, but I put to the noble Lord who moved Amendments Nos. 49 and 50 that the final line of subsection (3) in the proposed new clause would be improved by the addition of a comma after the word "representatives".

Lord Anderson of Swansea: I concede that part of the motive in tabling the amendments was to seek a signal about the importance of the voluntary sector in the eyes of the Government. To that extent, they have succeeded. Also, I am pleased that there is a consensus in the Committee about the vital role that the voluntary sector plays in Wales. I am extremely pleased by the linkages between individual Members of this House and important parts of the voluntary sector.
	On Amendment No. 49, I note what the noble Lord, Lord Crickhowell, said about saving time at a later stage if it were debated. It relates to what is the appropriate role for the Assembly. The annual report will, no doubt, be sent to a vast array of bodies in Wales. Surely, the Assembly should have a somewhat different status from the individual voluntary groups. The question is how this document should be dealt with—should there not, for this document and other matters, be some mechanism for seeking to endorse, approve or not approve those reports that are put before the Assembly?
	Amendment No. 50 relates to the partnership council. There may be some fear that, because, under the terms of the Bill, there is to be a partnership council involving local authorities, it might, in the words of the noble Lord, Lord Roberts, "eclipse" the existing council for voluntary organisations.
	I note the point about the missing comma at the end of Amendment No. 50. I would be prepared to accept an appropriate amendment in respect of the comma, if that were moved. Certainly, my old teacher at Swansea Grammar School would have been extremely upset. I can hear him saying now, "Anderson, you have a great future behind you", in respect of that. Basically, the two amendments have been debated. I thank all noble Lords for their contributions. I shall reflect on the helpful response given by my noble friend the Minister and, at this stage, I seek leave to withdraw the amendment.

Lord Kingsland: I rise to move Amendment No. 54 and to speak on the Questions whether Clauses 92 to 101 and 108 shall stand part of the Bill. I trust that the fact that I seek to remove the whole of Part 3 from the Bill will in no way undermine the genial and harmonious atmosphere in which today's deliberations have been conducted.
	Essentially, Part 2 of the Bill is a statutory system for devolving power to the Welsh Assembly, on a piecemeal basis, by Orders in Council. It is a two-stage process. Stage 1 delegates to the Welsh Assembly by Order in Council the power to legislate on certain matters within certain fields which are stipulated in Schedule 5 to the Bill. Stage 2 gives the Welsh Assembly the power to make what are called "Assembly Measures", as long as those measures are within the scope of the authority delegated by the process in stage 1.
	In essence, Assembly measures are primary legislation; but they do not obtain that character until they are confirmed by an Order in Council. These Orders in Council have two functions. At stage 1 they have an authorising function and at stage 2 they have what I would term a "camouflaging" function. At stage 1 they authorise the scope for the Welsh Assembly's legislative power; at stage 2 they camouflage the fact that what the Welsh Assembly is really doing is making primary legislation. Your Lordships should be in no doubt about that.
	In my view, one needs inordinate patience in reading Part 3 to reach the analysis that I have just put before the Committee. One would think that Part 3 would start off with stage 1 and then, having completed it, move on to stage 2. In fact, Part 3 starts with stage 2, wanders into stage 1 and in the end wanders back into stage 2. One might take the view that, when the Minister was settling these provisions, he either intended to obfuscate or had just had a very good lunch; indeed, it might have been a mixture of the two.
	We are opposed to Part 3 for a number of reasons. The first reason is that it is not authorised by a referendum. Like, I suspect, many of your Lordships, I am not an enthusiast for referendums. I believe that our long-standing system of representative government is the best way of taking all decisions in our country. But the fact is that the existing state of the devolved Assembly is the result of a referendum, so it must follow that any change in that existing state—any deepening of devolution—should also be mandated by a referendum. Such a procedure is set down in Part 4 of the Bill.
	One might, therefore, well ask why we need Part 3 at all. Why cannot we simply move to Part 4, have a referendum and, if the Welsh people authorise the degree of devolution, so be it? But that is not what will happen. As your Lordships know, this Bill has been extensively debated in another place. On Report, the point about a referendum was put to the Minister, Mr Ainger, in as direct a manner as possible. Mr Ainger's response was:
	"The purpose of referendums is to establish people's view on a change . . . It is pointless to hold a referendum if one knows that one is not going to achieve the change that is its purpose".—[Official Report, Commons, 28/2/06; col. 179.]
	In other words, in the view of the government Minister, referendums are valid only if they produce the result desired by the Government. I would have thought that the point of a referendum was to find out what people think. However, the conclusion that Mr Ainger and the Government have reached is that, since the referendum will not produce the result that they want, they will not have a referendum.
	Has that deterred them from making any change to the way in which Wales will be governed in the future? Certainly not, because we have Part 3, without a whisper of a referendum to authorise it. That point was also put to Mr Ainger in the debate in another place. Mr Dominic Grieve asked him:
	"Why does he think that part 3 is desired by the people of Wales?".
	Mr Ainger replied:
	"Because they voted for a Labour Government and a Labour manifesto".—[Official Report, Commons, 28/2/06; col. 180.]
	It is true that they voted for a Labour Government and it is true that the Labour Government had a manifesto. But there is not a scintilla of a reference in it to the procedure laid down in Part 3. Indeed, during the time leading up to the manifesto, no Minister or anyone else, as far as I am aware, made any reference whatever to any procedure remotely like the procedure in Part 3. It is true that there was an important debate about Welsh devolution in the months running up to the general election but that was in relation to the commission chaired by the noble Lord, Lord Richard; and the proposals that he made were a long way from what is contained in Part 3. In my submission, the argument—just in case the Government are inclined to include it in their response—that it was in the manifesto is no argument at all.
	The fact that Part 3 is not authorised by a referendum is only one reason why we think that it does not belong in the Bill. There are two others of equal weight. The first is that the act of delegation in stage 1 is to a very large extent unscrutinised by Parliament in Westminster, either in another place or in your Lordships' House. We are talking here about an Order in Council process; we are not talking about a process that concludes in an Act of Parliament.
	How will that process work? Your Lordships will look in vain at this Bill to find that out. In another place, Mr Ainger did to some degree flesh this matter out. Apparently, what is intended is something approaching the following. The Welsh Assembly will make a proposal for a draft Order in Council to delegate certain legislative powers to the Welsh Assembly within the fields capable of delegation under Schedule 5. That draft order will be laid before the Welsh Assembly; but it is envisaged that before it is laid extensive discussions will take place between the Welsh Assembly Government and Whitehall—I presume that "Whitehall" means the Secretary of State for Wales. Once that draft order has been passed by resolution, the draft order, together with the resolution, will appear both in your Lordships' House and in another place.
	However, the order will not be subject to any form of legislative amendment. It will be subject to something that Mr Ainger called pre-legislative scrutiny; but nowhere in the Bill is the nature of this pre-legislative scrutiny defined. The honourable Minister suggested that it might include consideration by the Welsh Affairs Committee and perhaps also by the Welsh Grand Committee. The conclusions of both those institutions would be dispatched to the Welsh Assembly in the hope that they might take them into account when they reached a final conclusion on the draft order. The final draft order, after further discussion with Whitehall, is then tabled as an Order in Council both in another place and in your Lordships' House. In the normal way of affirmative resolutions, we will have the opportunity to say yes or no to a text that we cannot amend. In my submission, this is a degree of scrutiny that falls well below the standard one would expect for such a dramatic constitutional change. That is the second reason why we wish to expunge Part 3 from the Bill.
	The third reason is that if one looks under the skin of what is proposed in Part 3, one sees that what is happening in reality is that delegation—at both stage 1 and to some degree stage 2—is not from this Parliament to the Welsh Assembly, but from this Parliament to the executive, from this Parliament to the Secretary of State for Wales. Throughout the process under stage 1, the Secretary of State for Wales is intimately involved in shaping the draft order. Indeed, it says expressly in the Bill that if in the end he is not satisfied with the draft order he can refuse to table it.
	This is a plain shift of power from the legislature to the executive. Moreover, even when the Welsh Assembly is authorised to produce Assembly measures, at the end of the day, even when that process is completed, it is still the job of the Secretary of State for Wales to table an Order in Council before it becomes the law of the land. It is almost as if this Bill is being used as a pilot for the Legislative and Regulatory Reform Bill, which your Lordships are expecting soon in this House.
	I would like to make one further observation in this context. At stage 2, once the Welsh Assembly has the power, the matter will go through to its conclusion. If the political parties that dominate Welsh Government and the political party that dominates the Government of the United Kingdom are of the same hue, one can see them being reasonably co-operative. But what if the Welsh Government in the future are of one political complexion and the United Kingdom Government of another political complexion? How on earth is it envisaged that the process laid down in the Bill could possibly work in any manner that could reasonably be described as harmonious? That said, I wish to emphasise again that the third reason that we are opposed to Part 3 is because of the amount of power that is switched from legislative bodies to executive bodies.

Lord Crickhowell: I acknowledge that the noble Lord and many of his friends have been pretty consistent on this issue, which is why I find it rather strange that they are content with this extraordinarily complex and unsatisfactory set of arrangements, which has been introduced almost entirely because the Labour Party in the other House are divided and because of the fact, already referred to by my noble friend Lord Kingsland, that Ministers do not believe they could win a referendum.
	My position, which I made clear at Second Reading, is that I would go straight to Part 4 and give the people of Wales those powers, if that is what they want. I acknowledge that my views were rejected by the people of Wales at the last referendum, by a narrow margin. I fully accept that verdict. I made it clear at Second Reading that I do not want to go back. However, if you are substantially going to change the devolutionary step that was approved by the Welsh people on that occasion on the basis of information clearly put before them, you must have a further authority.
	I would not go down the halfway house route. If the Welsh people want to take the devolutionary step and have the same powers as people in Scotland, let them do it, but let us get on with it. Indeed, as regards the suggestion that so far we on the Conservative Benches have done nothing to indicate that we really mean that, I have tabled amendments that would make a referendum easier. I have tried to remove some of the blocking mechanisms that stand in the way. I have said that if a clear majority—rather than a two-thirds majority—of the Assembly want to go down that road, it should not be possible for the Secretary of State to block it. Let us have no aspersions cast on our willingness to go down that road. Indeed, a number of my colleagues in another place made that very clear. Mr Gummer made a passionate speech in which he said that he would like to go down that road and get on with it. There are many other examples of that.
	I refer to the power that we are discussing. Incidentally, one of the most curious arguments advanced by Ministers in another place against a referendum is that the scheme that the Government have devised is so complicated that no one will understand it. Apart from the feeling that it was pretty insulting to the people of Wales to be told that they would find the whole thing much too difficult to understand, the general proposition was included by the Labour Party in its manifesto but in such general terms—I have the wording of the manifestos in front of me—that no one could have expected the Welsh people to understand what was actually proposed. Surely, if the Welsh people are to be told that they have given a matter their approval, they should have clearly put before them an explanation of what it is about.
	I do not want to go over the ground that many of us covered in great detail at Second Reading, but this is not a modest measure. It is a Trojan horse measure that enables very wide powers to be taken step by step so that we can go down the full road to the kind of legislative Assembly that the Liberal Democrats say they want without a referendum at all. We can get there step by step under this arrangement. That is one of the reasons why we object to it. One should have no doubt about the extent to which this measure can widen the powers and scope of the Assembly and its Ministers. The report of the Delegated Powers and Regulatory Reform Committee is very helpful in this context. As I do not think that its comments have been quoted before in our debates, I propose to quote some of them now. One of the points the committee emphasises is the breadth of the measure. It explains that the competence of the Assembly is defined by reference to 20 fields set out in Schedule 5. Paragraph 24 of the report points out:
	"There is no limit to which fields may be added, or which matters within each field. The fields could even be more extensive than the list of subject headings in Schedule 7 (which relates to Part 4 - Assembly Acts)".
	At paragraph 26 of the report the committee reasonably states:
	"It is for the House to decide whether it is appropriate for such a degree of competence to be conferred by subordinate legislation. It is the apparent purpose of the bill for Part 3 to be a gradual process and for Part 4 to be a more definitive settlement. We consider that an incremental process of increasing the Assembly's competence need not necessarily be achieved by a series of bills. The idea of areas of competence being varied by subordinate legislation is precedented in the Scotland Act 1998".
	The committee goes on to say,
	"What is different here is the proposed scale of the use of the power: the Scotland Act 1998 itself defines the devolution settlement and the Order in Council power may be used to modify it; in contrast, it is here proposed that Orders in Council will define the competence of the Assembly".
	In other words, by this piecemeal measure and without the approval of the Welsh people taken in a referendum, we are going down the full legislative route. That is wholly wrong and wholly improper. We should be either honest about the matter and face up to it—we want full legislative powers given to the Assembly—and deal with it by the proper legislative route, or we do not. It seems to me wholly wrong to abandon the opportunity for anyone in this House to carry out the vital process that it does so well of looking at the detail of legislation—the devil is in the detail and cannot be covered by pre-legislative scrutiny—and allow this vast extension of power without proper authority from the people of Wales. I support the amendment.

Lord Elystan-Morgan: I suspect that all those who have taken part, and will be taking part, in this debate will run true to form regarding their views on devolution. Mine go back a very long way, perhaps even longer than those of the noble Lord, Lord Thomas of Gresford. I was a very young boy when I decided that, so far as I could understand, the gaining of a home rule parliament for Wales was not only to be desired but a very condition of the continued existence and development of the nationhood of Wales, and I have not changed my mind.
	The noble Lord, Lord Kingsland, said that the basis of his case was that we are dealing in Part 3 with primary not subordinate legislation. That is the main plank of his platform. However, the Explanatory Notes deal with the matter very differently. I hope that I may have the Committee's indulgence to quote paragraph 318 of the Explanatory Notes, which states:
	confers on the Assembly the power to make a type of subordinate legislation in relation to Wales called 'Measures of the National Assembly for Wales' in English, or 'Mesurau Cynulliad Cenedlaethol Cymru' in Welsh. They are referred to in this Bill as Assembly Measures".
	Then there follow these words:
	"The ultimate right of Parliament to legislate in relation to Wales, even in principle on a matter over which legislative competence has been conferred on the Assembly, is preserved".
	There can, therefore, be no doubt at all that we are dealing with subordinate rather than primary legislation. It is casuistic to argue on that point.
	Under the Local Government Act a county council has wide powers enabling it to adopt model clauses of legislation. Does that make it a primary legislature? I doubt it. I do not in any way wish to disturb the placidity of the waters of agreement, consent and goodwill that have existed in relation to this Bill by anything that I say tonight but I am afraid that, so far as the Conservative Party is concerned, it has been reluctantly dragged into accepting devolution at all and it is essentially a rearguard action. What one has here is the determination of the Conservative Party to put a stop to the whole process of what one might describe in one way as devolution and in another way, so far as the Welsh Assembly is concerned, evolution.
	If Part 3 were taken out altogether, the Welsh people would be deprived of a real advantage: what I described at Second Reading as a bridge between the present situation and the situation where the people of Wales can consider whether they would wish to take up the enabling powers that will essentially have created the foundations of a Welsh parliament. The experience over a few—I hope not too many—years would enable the Welsh people to judge in a mature way exactly what these added powers mean and what they lead to. I do not for a moment believe, therefore, that the main case put forward by the noble Lord, Lord Kingsland—that one has broken over a fundamental boundary—holds any real truth at all.
	We are still dealing with the area of subordinate legislation. The powers of this House and of the other place remain absolute. The capacity to set up any number of appropriate bodies, to deal in detail with every aspect of each of these proposals, is infinite. I do not see, therefore, that it is a case of robbing either House of its essential sovereign authority. The Richard commission concluded that a referendum was entirely necessary for Part 4. Why? That is because Part 4 sets up, essentially, a home rule parliament—nothing less than that. Part 3 is a path towards that. If the Conservative Party were to take the view that every evolutionary advance made by the Welsh people for the Assembly must be the subject of a referendum, that would be nonsense. Since the Assembly was created in 1998, there have been, large and small, hundreds of aggregations to its authority. Does one then hold a referendum and ask, "That is what has happened over seven years. Are you, the Welsh people, content with that or not?"? With very great respect, there is a fundamental inconsistency in the attitude of the Conservative Party. I was a Member of the other place in 1972, as were the noble Lords, Lord Crickhowell and Lord Roberts of Conwy, when the European Communities Act was passed. I do not remember the Conservative Party at that time asking for a referendum on such a fundamental matter. Indeed, it stood unanimously against such a referendum. I suggest, therefore, that although there are old echoes here of Conservative opposition to devolution and evolution in relation to a Welsh Assembly, this amendment should be rejected.

Lord Davies of Oldham: The committee noted—the noble Lord was fair enough to quote this point but I want to use it as evidence for the Government's case—that use of the new mechanism would be an incremental process, with government and Parliament deliberating at each step on proposals to confer legislative competence over specific matters. It would be for Parliament to decide on a case-by-case basis what legislative competence should be conferred on the Assembly as the draft Orders in Council come forward. The important point, which is recognised by the committee, is that each proposal for new legislative competence is subject to the necessary parliamentary approval.
	I recognise, and the noble Lord, Lord Crickhowell, is absolutely right, that the committee chaired by the noble Lord, Lord Dahrendorf, approached this issue with its customary due diligence and examined it very carefully. But the noble Lord will not be surprised to learn that we regard the position that the committee has taken up as one to which the Government are able fully to respond, because we are indicating that parliamentary approval is necessary at each stage. What is parliamentary approval for? Not for a Secretary of State's arbitrary act, which was suggested by the noble Lord, Lord Crickhowell, that somehow these Orders in Council were the property of the Secretary of State. The Secretary of State for Wales is unlikely to stand idly by while issues of this moment are being discussed. Of course he would expect to be consulted; I do not know how we would think he was fulfilling his duty as Secretary of State for Wales if he were not involved. But the orders come to this House after the democratic body in Wales has decided that they should do so. If the democratic Assembly in Wales decides that they should not go forward, they do not. What can be arbitrary about that when an Order in Council mechanism is being used—but one that is actually to convey powers that a democratically-elected Assembly is seeking? That is the basis of Part 3.

Lord Davies of Oldham: The noble Duke is absolutely right in his definition; I am merely describing what the Welsh counterpart to that is. The Orders in Council for Wales are not arbitrary, authoritarian acts of an executive; they are the democratic will of the National Assembly being translated to this Parliament for both Houses to consider whether those powers should be conferred. I am merely indicating that, far from the Opposition's case that what is involved here is an arbitrary process that requires a referendum, what we are involved in is a democratic process that fulfils the objectives of the Welsh people.
	It was the case that the Conservative Party in the other House went a little further than the noble Lord, Lord Kingsland, has done today. It faced up to the fact that there are some difficulties with regard to the referendum, because we would have to work out what kind of question could be put to the Welsh people, who enjoy some powers but now may wish to increase those powers; not as a total package, but incrementally. The shadow Attorney-General had a shot at the question that should be put to the Welsh people:
	""do people wish to be governed by Order in Council moderated in its detail by the Welsh Assembly".—[Official Report, Commons, 9/1/06; col. 119.]
	What kind of participation in a referendum does any noble Lord think would take place under a question of that degree of abstruseness? That is the nature of the problem. What we have already is a Welsh Assembly with powers. There are good reasons and pressures from within the Welsh community for additional powers, but they are not powers that one can put into a total package and say, "This is the question before the Welsh people—do you want this in its totality?". It is not like a European Community referendum, which of course the Conservative Party did not offer; it is not like a referendum for the Scottish people, which the Conservative Party never offered. It is different from those, and that is why the Government are saying that this is not the kind of question that is subject to a referendum. But it must follow due democratic process, and I am identifying the process that will be followed.

Lord Davies of Oldham: But it might be the case that the question is impossible to put because the process whereby one develops the interests of the people of Wales is more difficult than the yes/no concept of a referendum question. Why should it be more complex? Is it because the Government have set out to make it more complex? No, because what the Government have created and what has been in place for the people of Wales is a partially-devolved Administration and powers that are very limited. We always anticipated that these powers would be subject to pressure for enhancement and improvement as the Assembly developed in its confidence and as the Executive became more and more responsive to the Assembly. The two main concepts are in this Bill; on the one hand separating the Executive from the legislature, which is one major principle in the Bill; and secondly how we have a process that is subject to democratic scrutiny both in Wales, which will be the origin of the request, and in the United Kingdom in both Houses of Parliament when the requests come forward.
	It might be said that this looks like a very torturous road, and a partial road, and one which will take a period of time to deliver. So it will. My noble friend Lord Richard—who has been ever-present with us and now when I want to call him in aid regrettably is not in his place—thought that the process would take up to 2011 before there were additional powers for the Welsh Assembly. Under this process, if the National Assembly so wants it, and if this House and the other place so agree, the process will operate more quickly. It might be said, "This is a pretty complex operation". The noble Lord, Lord Kingsland, who was looking for difficulties rather than helping us with solutions, said, "What about a situation where the Assembly Government in Wales might be different in political hue from the rest of the United Kingdom?". That is a concept that beggars belief at present. If that were to occur, the noble Lord is right to identify that there would be greater difficulties. I have no doubt that a government hostile to what the National Assembly of Wales sought to achieve would use this process, through its democratic mandate, to resist some of these proposals. After all, it would have that right; that is how these Orders in Council are meant to be processed.
	Does anybody think that that is more difficult for the people of Wales than what obtains at the present time? Does anybody think that it is easy for the National Assembly and the Executive in Wales to contemplate how they would successfully influence United Kingdom legislation if the Executive that initiated such legislation was from another party? It is a clash of two mandates which we all recognise. In any devolved administration that clash will, from time to time, happen. The noble Lord, Lord Kingsland, cannot say that this process will throw up a great many difficulties when a clash of two mandates occurs. Before this concept was ever devised, differences between the administration of the United Kingdom and that of Wales would throw up just such difficulties.
	Let us make no bones about the fact that the Conservative Front Bench is proposing, for the first time in the Conservative Party's recent history—I cannot refer back to Edmund Burke, though I am conscious that one or two noble Lords may be able to do so—that it is in favour of enhancing the democratic rights of the people of Wales. It is in favour of greater democracy in Wales, subject to a referendum, but it does not have the faintest idea what the question put to the people of Wales would look like, or even if it would be intelligible. The alternative is the Bill; I support and defend the Bill.

Lord Kingsland: Thank you very much. The noble Lord, Lord Elystan-Morgan, with whom I have served on many occasions on the Wales and Chester circuit, and for whose judicial and political abilities I have the highest regard, challenged me on the point of subordination. Technically, Welsh Assembly measures are subordinate, in the sense that they become binding law only when they are approved by Order in Council. That Order in Council, the Stage 2 order, is not brought to this House. The Secretary of State has no discretion in deciding whether or not to table that order. Once the Welsh Assembly has passed a measure, the Secretary of State is obliged to bring that order before the Privy Council. It is exactly the same situation as for the Overseas Territories.

Lord Kingsland: I may be corrected by the Government subsequently. I understand that there are no circumstances under which, at Stage 2, the Secretary of State would resile from tabling an order following a measure in the Welsh Assembly. The substance of what the Assembly is doing is producing primary legislation. I see the noble Lord nodding. However the Government want to camouflage it, those were the words I used at the beginning of my observations. The substance of what the Government seek to do in Stage 2 of this Bill is to give primary legislative powers to the Welsh Assembly. I have no objection to that, but I believe that it should be a consequence of a decision by the Welsh people, and not simply of a Bill in this Parliament.

Lord Kingsland: It does not lie here, because where Assembly measures are concerned in Part 2, the power has already been delegated to the Assembly under Stage 1. I see the noble Lord shaking his head; but I believe that the position I have taken to be absolutely right.
	If the Committee were to support Part 3, it would endorse a system of executive decision-making between the Government of Wales and its First Minister on the one hand and the Secretary of State for Wales on the other. This Parliament, shamefully, has only a passing interest in what is going on. It has no right to amend to support any view that it expresses; there is absolutely no obligation for either the Welsh Government or the United Kingdom to take any notice. That is not a system the Government ought to be proud of.
	I would have put this matter to the vote if we had finished half an hour earlier. It is plain to me now that the hour is late. Therefore, with reluctance, I am obliged to withdraw the amendment and bring it back at Report stage.

Lord Hunt of Wirral: My Lords, I am very grateful to the Minister for coming to the Chamber today to explain the Government's position on these regulations. I declare my interest as a solicitor and a partner in the firm of Beachcroft LLP. I have been inspired to put down this Motion to revoke by the very serious concerns raised by those who are most directly affected by the regulations; namely, those involved in turning around and, in particular, rescuing failing companies where the transfer of undertakings is all important. Above all, these highly skilled professionals need as much certainty and as little uncertainty as possible. Our concern is with the insolvency provisions of the regulations, specifically with their drafting and their practical application.
	These regulations were intended to give effect to an EC directive from 2001, fully five years ago. The Government have had plenty of time to get them right, but I believe they have failed abjectly. Over a year ago, the DTI first consulted on the draft regulations and respondents included R3, the representative body for insolvency practitioners in England and Wales, whose expertise in these matters is universally recognised as being second to none. It drew attention to the unsatisfactory nature of the regulations, setting out its detailed concerns and suggesting alternative wording that would have made the regulations workable. Its advice, however, seems to have been completely ignored. Despite many subsequent representations to Ministers and officials, still nothing was done to improve matters.
	In the past, the operation of TUPE has deterred potential purchasers from buying insolvent businesses because of the prospect of inheriting onerous and sometimes uncertain liabilities. One of the stated aims of the regulations is to make it easier for insolvent businesses to be transferred to new employers by reducing some of the burdens that will pass across to a purchaser. We on these Benches fully support this policy objective. Insolvency practitioners, too, are as anxious as anyone else that as many jobs as possible should be saved when an employer becomes insolvent. However, if the regulations are to have the desired effect, they must be drafted in clear, unambiguous language. Only then will those dealing with insolvencies and those acquiring businesses subject to insolvency proceedings know where they stand and precisely how the provisions of the regulations will affect transactions.
	Unfortunately, the regulations, as regards the insolvency provisions, failed to achieve that. That is because they are drafted in language that is so loose and imprecise it is not possible to discern with any clarity how they are supposed to work. Instead of bringing clarity, they bring confusion to new, unprecedented heights.
	My principal concerns are that these regulations, first, fail to specify the types of UK insolvency proceedings to which they are intended to apply; secondly, fail to make clear which liabilities will pass to a purchaser and which will not; and, thirdly, impose unrealistic obligations on insolvency office holders with which it would be impossible for them to comply and with penalties that will ultimately fall on creditors. The regulations transpose the vague generic language of the directive without attempting to specify how it is to apply in the context of specific UK insolvency proceedings. Only expensive and time-consuming judicial interpretation will establish the circumstances in which they are intended to apply.
	The regulations seek to draw a distinction between two types of insolvency proceedings: those opened with a view to the liquidation of the assets of the transferor and those opened not with a view to the liquidation of the assets. However, that distinction makes no sense at all in the context of UK insolvency. It is unclear which of the UK insolvency regimes would fall within which provision. Assets are sold in every type of insolvency process, whether administration, administrative receivership, company voluntary arrangement or liquidation, even where the whole or a part of the business is preserved and sold as a going concern. In some cases, part of a business will be preserved while other remaining assets are disposed of piecemeal.
	In that context, I ask the Minister what is the phrase "[not] with a view to the liquidation of the assets of the transferor" supposed to mean? How is it intended to apply? It is possible for a business to be sold in any of the regimes. Consequently, it is possible for employees of insolvent businesses to be affected by a transfer or proposed transfer of the business, regardless of the type of insolvency regime into which their current employer has entered. Where there is a transfer, the treatment of the employees should be the same, regardless of the insolvency process used. The uncertainty caused by ambiguous drafting will cause delays only in the administration of the insolvency and, most important of all, reduce the chances of successful rescue and preservation of jobs.
	It is unbelievably complacent of the Minister's colleagues, by their own admission, to leave it to the courts to sort this mess out, ultimately at the expense of creditors and to the detriment of employees. Either the regulation should be amended to make it clear explicitly which provisions apply to which types of insolvency process or they should simply apply to all insolvency proceedings equally without distinction.
	Regulation 8 says that where the transferor is subject to insolvency proceedings which have been opened—
	"not with a view to the liquidation of the assets of the transferor"—
	certain accrued liabilities will be paid from the national insurance fund with the balance of any liabilities passing to the transferee. Reference is made to the debts payable by the Secretary of State under the redundancy and insolvency provisions of the Employment Rights Act 1996. However, the interpretation of this provision also is uncertain.
	On a straight reading, the regulation seems to provide for the payment out of the national insurance fund only of the debts payable under the insolvency provisions. This makes it difficult to understand the reference to the redundancy provisions. First, the guidance note issued by the DTI in February indicated that payments would be made out of the national insurance fund in respect of both the redundancy and the insolvency provisions. On 3 April, only three days before these regulations were due to come into force, the Redundancy Payments Office issued a statement of its own. It suggested that where there is a transfer or an unfair dismissal made in connection with a transfer, it will pay only the arrears of pay and accrued holiday pay, which are often minimal or even non-existent. There would be no termination or redundancy payments at all.
	So, again, the Government have added to the confusion. The left-hand appears to contradict the right-hand which, I believe, is unacceptable and must be resolved as a matter of urgency. It is difficult to see how these provisions should or could be amended until Ministers explain exactly what the Government were seeking to achieve by these provisions and which liabilities the Secretary of State is prepared to permit the national insurance fund to meet.
	Before closing, I would like to raise another problem. The regulations include, first, a requirement for the transferor to provide the transferee with information regarding the employees to be affected by the purchaser with a potential liability of at least £500 per employee for a failure to comply and, secondly, joint and several liability between transferor and transferee in the event that employees are not properly consulted prior to the transfer taking effect. These provisions fail to take into account the unique circumstances in which transfers of businesses are affected in the insolvency arena. Within the very tight timeframe of a live insolvency, it will not usually be possible to comply with this requirement and the insolvency practitioner will usually not have enough information to do so in any event. Insolvency practitioners, attempting to act in the best interests of creditors by effecting a swift sale, should not be exposed to the potential costs and delays of defending claims in a tribunal by purchasers on the basis that full information was not given.
	Furthermore, any award made by a tribunal could have a significant impact on the return to unsecured creditors. Should not the regulations have excluded the application of these provisions to insolvency-related transfers? If these regulations stand, it will arguably be impossible for any insolvency practitioner, prospective purchaser of an insolvent business, employee or any of their professional advisers to ascertain with certainty what they mean, what they are intended to achieve and where they should apply.
	The practical effect will be that fewer jobs and businesses will be saved, and that is surely precisely the opposite of everything we are seeking to achieve. The insolvency provisions of the 2006 regulations are uncertain and ambiguous. They even conflict with the Government's own guidance notes. What a mess!
	Many of us have been inundated with representations urging the amendment of these regulations. I have been greatly assisted by my noble friend Lady Miller of Hendon and R3—the Association of Business Recovery Professionals—the Insolvency Lawyers' Association and some of the leading law firms. All of us believe that these regulations are wholly unacceptable, should be withdrawn, reconsidered and redrafted. I beg to move.
	Moved to resolve, That this House calls upon Her Majesty's Government to revoke the regulations laid before the House on 7 February (SI 2006/246) [25th Report from the Merits Committee].—(Lord Hunt of Wirral.)

Lord Sainsbury of Turville: My Lords, the Transfer of Undertakings (Protection of Employment) Regulations 2006 are unquestionably important. The Merits Committee has also noted their significance. I am therefore pleased that we have had an opportunity to discuss these new TUPE regulations today. As we know, these regulations implement the Acquired Rights directive in the UK. They are therefore made primarily under Section 2(2) of the European Communities Act 1972 via the negative resolution procedure.
	I say to the noble Lord, Lord Newby, that we have consulted extremely widely, including with the Association of Business Recovery Professionals. We have listened to its views. If we had thought that its views and the proposed course of action would improve the situation, we would have amended the regulations and taken account of that. However, it is our view that they do not and that they merely would have replaced one kind of uncertainty with another, as I shall explain. We therefore felt that we should go forward on this basis.
	I was asked why we did not take more time to get these regulations right. It has taken a very long time to bring these regulations forward. Work started in 1997, and we have been pressed to finalise the regulations and improve the protections provided by them. Against that background, it would have been a grave mistake to delay them further.
	The original TUPE regulations were introduced in 1981. They have given rise to large amount of litigation and have been repeatedly tested in the tribunals and courts. This new set of regulations represents a major revision of those 1981 regulations. They have been in preparation for many years and have been the subject of three rounds of public consultation.
	Our aims in revising the 1981 regulations were several. We needed to update them to reflect the changing face of our labour market, in particular the greater use of outsourcing and similar practices. We also needed to clarify the law, both to reflect important developments in case law across the 25 years or so during which the 1981 regulations were in force and to address some of the inconsistencies that had arisen between domestic and European interpretation of the directive and the regulations. We wanted to revise them also to take account of changes to the Acquired Rights directive.
	The revised Acquired Rights directive provided new possibilities for member states to develop their law on transfers. We have taken advantage of those possibilities. For example, the 2006 regulations place a new obligation on the transferor employer to provide information to the transferee employer about the employees who are transferring. That information, which should normally be provided in advance of the transfer occurring, should help the new transferee employer to prepare for the responsibilities and obligations that he will inherit. It should therefore help ensure a smoother transition, benefiting both the new employer and the transferred employees.
	Another major set of changes flowing from the new directive concerns the treatment of transferors subject to insolvency proceedings at the time of transfer. It is this element of the new regulations, which is in Regulations 8 and 9, that has attracted speakers in this debate. In explaining our position on these two regulations, it is fair to say that our objective in making these changes is shared by most, if not all, of us. Regulations 8 and 9 aim to make it easier for a new transferee employer to take on all or some of the business from a transferor employer who is insolvent or, more precisely, is the subject of insolvency proceedings. In other words, it aims to support the "rescue culture", preserving as many jobs as possible in the difficult situations which can arise when businesses face extreme financial difficulty.
	Regulation 8 assists by relieving the transferee employer of some of the debts owed by the transferor to the transferring workers. Under the 1981 regulations, most of those debts would have been transferred to the transferee, creating a disincentive for a new employer to step in. Under the 2006 regulations, we have relieved the new employer of some debts that will now be met through the National Insurance Fund. For example, the fund will meet arrears in pay owed to the transferring employees up to the statutory maximum that can be paid under the Employment Rights Act 1996. This provision applies where the transferor is the subject of insolvency proceedings which have been opened not with a view to the liquidation of the assets of the transferor.
	In addition, Regulation 8(7) disapplies Regulations 4 and 7 in those extreme cases where the transferor is subject to "bankruptcy or analogous" insolvency proceedings which have been opened with a view to the liquidation of the assets. This means that if a transfer occurs in those circumstances, the TUPE provisions concerning continuity of employment and the maintenance of contractual terms and conditions do not come into play.
	Regulation 9 assists the rescue culture by creating room for the transferred employees to agree new terms and conditions with the transferee or the insolvency practitioner. Under the 1981 regulations, the transferee employer would have to have taken on the employees under their old terms and conditions. Regulation 9 loosens that arrangement and, in effect, permits the parties, subject to particular safeguards, to agree to transfer on different, perhaps inferior, terms and conditions. The safeguards limit contractual changes to permitted variations of contracts that are designed to safeguard employment opportunities by ensuring the survival of the undertaking. They also involve the participation of union or other representatives in the process and the provision of information on proposed contractual changes to the affected employees. In cases where bankruptcy or analogous proceedings are taking place, there is even wider scope to apply new conditions because Regulation 4 does not apply.
	There have been two broad criticisms of these insolvency provisions and they were made by the noble Lord, Lord Hunt, this evening. First, it has been suggested that Regulation 8 and our guidance are insufficiently clear in identifying which debts are met from the National Insurance Fund. Secondly, doubts have been expressed about our approach to copying out the directive when defining how the various categories of insolvency proceeding are covered.
	Let me start with the debts issue. The National Insurance Fund will be able to play a role where employees transfer within the scope of the regulations and they are owed certain contractual debts by the transferor. The fund will cover any arrears in pay and holiday pay owed by transferor, subject to the statutory limits. Statutory redundancy pay does not come into play for those employees because they have not been made redundant during the transfer process and TUPE regulations have the effect of deeming such employees not to have been made redundant on the date of the transfer.
	The situation is different for employees who would have physically transferred had they not been dismissed in advance of the transfer. Such dismissals may be lawful under TUPE where the dismissals were connected with the transfer and were made for an,
	"economic technical or organisational reason entailing changes in the workforce".
	Those employees are entitled to statutory redundancy pay, and the National Insurance Fund will meet those debts.
	Where employees have been dismissed because of the transfer itself or for a reason connected with the transfer that is not an economic, technical or organisational reason, that dismissal is unfair under the TUPE regulations. Employees in that position must complain to an employment tribunal of unfair dismissal, seeking the standard compensation for their loss. The liability in that situation could pass to the transferee, but it will be for the tribunal to decide where liability falls. The fund is not responsible for the debts arising from tribunal awards against the transferee.
	The Insolvency Service has provided a detailed note to insolvency practitioners that sets out the various ways in which the fund can assist. That detailed note clarifies the position adequately and it clear what the situation is. It is complicated, but we are dealing with a complicated situation involving TUPE regulations in an insolvency. There is no getting away from that complicated situation, but it is clear what the National Insurance Fund can do.
	Let me now turn to the set of questions concerning our decision to copy out the relevant parts of the directive. As a result, we have not specified how each of the many types of insolvency proceeding would be treated. The main reason for adopting our preferred approach was to be sure that we implemented the directive correctly. Had we adopted a different approach, errors might have been made. We are often criticised in this or other places for failing to implement our EU obligations correctly. On this occasion, we have sought to avoid that potential error.
	It has been said that our approach creates uncertainty because it fails to specify how each type of insolvency proceeding is to be treated. Some argue that it is unreasonable to leave such matters to the courts. However, it is impossible to give absolute legal certainty when applying European directives of this kind. If we had chosen other wording for our regulations—for example, if we had listed each type of insolvency proceeding covered by Regulation 8(6) and 8(7)—we would potentially have created scope for legal challenges about our implementation of the directive. It is not possible to get rid of all uncertainty. Either there is uncertainty about how the general point in the directive applies to particularly circumstances in this country or, if that is specified, there is the uncertainty of that method being challenged because it does not properly implement the European directive.
	Furthermore, the listing of insolvency proceedings would have made the regulations much more complicated. This point was raised by my noble friend Lord Lea this evening. How would they deal with the transfer of an undertaking located in the UK that was part of a French or Italian business entity that was the subject of insolvency proceedings in its home country? To cater for those circumstances, it might be necessary for Regulations 8(6) and 8(7) to specify how each of those foreign insolvency proceedings were to be treated. That would clearly be ludicrous, but it is a problem that can arise when regulations are drafted in fine detail.
	I recognise that some insolvency practitioners are concerned about the regulation. In our judgment, the generic descriptions of relevant insolvency proceedings in Regulations 8(6) and 8(7) are reasonably clear. In our view, there are unlikely to be significant problems.
	Let us look at the position of administrations, the main category of insolvency proceeding. Regulations 8 and 9 were drafted with the intention that where there was a transfer in a business or undertaking, and the transferor was in administration under the Insolvency Act 1986, employees engaged in that business should be transferred to the acquirer of the business or undertaking. In other words, we intend that Regulation 8(7) should not apply in that situation, but the other provisions in Regulations 8 and 9 would apply. It is our view that the regulations have the intended effect. The key words in Regulation 8(7) are "bankruptcy proceedings" and "analogous". The expression "bankruptcy proceedings" is to be interpreted as meaning proceedings that have as their main or only purpose the realisation of a debtor's assets with a view, after payment of the associated costs and expenses, to the distribution of the proceeds to the debtor's creditors. A key feature of bankruptcy proceedings is that they are collective proceedings; in other words, they are for the benefit of all creditors. Administration does not fall within the expression "bankruptcy proceedings". The key question is whether administration is analogous to bankruptcy proceedings and it would appear that it is not. The principle or main purpose of administration is not the realisation of the debtor's assets with a view to distribution among creditors. The statutory purpose to which administrators are obliged to have regard first is the rescue of the company. However, the interpretation of the regulations is ultimately a matter for the tribunal and the court.
	The noble Lord, Lord Hunt, made the point that few transfers of insolvent businesses involve the sale of all assets to the transferee. This is another area where there has been concern. Some assets are simply sold off to the highest bidder as in a liquidation. Just because some assets are liquidated, it does not follow that Regulations 8(6) and 9 do not apply. The regulations refer to the "liquidation of the assets". They do not refer to "the liquidation of some assets" or to "the liquidation of any assets". It is therefore very difficult in our judgment for the tribunal and courts to conclude that the wording of the regulations and the directive means that where some assets are liquidated, Regulations 8(6) and 9 do not apply.
	I do not pretend that the regulations are completely certain in their effect and in their capture. That is inherent within much new legislation. Complete or near-complete certainty cannot be found in these situations.
	I turn to one or two specific points that were raised. The noble Lord, Lord Hunt, said that it is impractical for insolvency practitioners to supply the level of detailed information required in the short time periods within which they typically operate. Regulations 11 and 12 have flexibilities within them. In general, the information must be supplied at least 14 days before the transfer, but this can be relaxed when it is impractical for the transferor to do so. It is perfectly possible for an insolvency practitioner to argue that he should supply the information later because he is new to the business. The tribunal can also waive the minimum compensation for a failure to supply the information where it considers it just and equitable in all the circumstances to do so. Again, the insolvency practitioner could argue for this discretion to be used where it was impossible for him to assemble the necessary information. That said, we believe that in most cases the information can easily be assembled by the insolvency practitioner and most information will be located on payroll and in other personnel information, which should be readily accessible.
	The noble Lord, Lord Hunt, said that the DTI guidance on the provisions is unclear. The statement in the response document is factually correct, although I concede that it might potentially confuse the reader. Where a statutory redundancy payment is made, the individual who receives that payment would need to build up his entitlement from zero. The phrase was not meant to imply that all transferring employees should receive such a payment on a transfer, whether or not they lost their job. Indeed, the opposite is the case where employees take out employment with the transferee because, in general, they will not be made redundant by the transferor in the lead up to the transfer. However, there will be some cases where affected employees are made redundant for an economic, technical or organisational reason connected with the transfer in anticipation of the transfer or afterwards. Those employees are entitled to statutory redundancy payments so long as they meet the standard and other criteria. The position on that is set out very much more fully in the guidance issued by the Insolvency Service.
	The noble Lord, Lord Hunt, spoke about the justification for making the transferor and the transferee jointly and severally liable for a failure to consult. He asked whether that would inhibit the rescue culture and deter potential employees from taking on an insolvent business. There is no reason why consultation cannot be carried out properly in extreme situations of insolvency. We would want parties to ensure that they occur in practice. Joint and several liability provides an incentive to both employers to ensure consultation occurs. Good prior consultation usually smooths the way for transfers by reducing employee resistance. So our proposals would in fact provide a stimulus to business rescue.
	The 2006 TUPE regulations have taken many years to produce. They have been the subject of an enormous amount of prior consultation. We believe that we have implemented the directive correctly and have updated the regulations to reflect the way our modern labour market works. We had to make a decision about whether to copy out how the directive was produced, or, alternatively, try to specify the provision in greater detail in terms of the UK and then face the situation of uncertainty because of challenge that it did not properly implement the directive. We have taken the first course because we think that will lead to greater certainty. I think that is the right course to take.
	However, we will monitor closely how the new regulations operate in practice. If problems emerge we will consider the case for amending the regulations. With those assurances and explanations, I hope that the noble Lord will feel able to withdraw his Motion.

House again in Committee on Clause 92

Lord Roberts of Conwy: The argument for a referendum before the Assembly measure provisions in Part 3 come into force is similar to the Government's argument for a referendum on the commencement of Assembly Act provisions in Part 4. The argument is similar because the effect of implementation of Parts 3 and 4 could be similar over time. This was elicited in Committee and on Report in the other place and has subsequently been clarified in the 17th Report by the Delegated Powers and Regulatory Reform Committee. My noble friend Lord Crickhowell was quite right in saying that that report has not been referred to sufficiently, but I shall do so now. I shall quote the statement in paragraph 27, page 5, of that report, to which my noble friend referred earlier. The report says:
	"We draw to the attention of the House the width of the power in Part 3 and that it could, subject to the necessary parliamentary approval, be used to achieve a situation (by filling up the "fields") which is not really distinguishable from that under Part 4 (for which a referendum is required)".
	We recognise that the committee's judgment is independent of party interest and noble Lords will respect it as totally non-partisan. It highlights the close interrelationship between these two parts of the Bill and the situations that may result from their implementation. I remind your Lordships that they are described by the committee as "not really distinguishable". Why then should a referendum be required to introduce Part 4 but not Part 3? The short answer is that the Government do not see eye to eye with the committee, or the Opposition, on this issue. They believe that the outcomes of the implementation of the two parts are very distinguishable.
	The Government's commitment to a referendum goes back to the White Paper Better Governance for Wales, in particular to paragraphs 3.22 and 3.23, on page 25, where it is stated that the enhanced powers described in the preceding paragraphs,
	"would be adaptations of the current settlement and the Government believes that they do not require a referendum".
	The enhanced powers include those available under Part 3. The White Paper goes on to say that if further transfers of primary legislative powers over all devolved fields are required:
	"The Government is clear that this would represent a fundamental change to the Welsh settlement and would have to be endorsed in a referendum"
	I do not query that referendum conclusion. I believe the Liberal Democrats do. They are not in favour of referendums.
	Let us be clear that what we are talking about here is the quantitative rather than the qualitative difference between the outcomes of Part 3 and Part 4. It is not a fundamental change at all, but an incremental one. That is a description that the Government use from time to time. The noble Lord, Lord Davies, used the word "incremental" earlier in our proceedings today. The very meaning of "incremental" is quantitative, not qualitative. If a referendum under Part 4 produced an affirmative result and the provisions came into force, one of the immediate consequences would be that Part 3 would cease to have effect, as the Explanatory Notes and Clause 105 make absolutely clear.
	In short, Part 3 would be submersed—not subsumed but submersed—by Part 4. The line between Part 3 and Part 4—where a referendum is not required and where a referendum is necessary—is a very fine one, and it is not easy to detect on the slippery slope from a little primary legislative power in a corner of a devolved field to full primary legislative power all over the devolved fields in their entirety.
	The implementation of Part 4 is by far the more satisfactory from a democratic point of view, as my noble friend Lord Kingsland emphasised earlier, because it would represent the will of the Welsh electorate as expressed in a much-needed referendum. The interim Part 3 position is totally unsatisfactory, because it leaves the legislative competence of the Assembly to be defined by Orders in Council, which are ultimately controlled by the Secretary of State. That is an autocratic, not a democratic, solution. The incremental process of increasing the Assembly's competence requires the endorsement of the electorate in a referendum just as much as, if not more than, the ultimate goal of full primary legislative power in the devolved fields. That is why we are calling for a referendum before the process begins and before Part 3 is implemented, rather than Part 4. A referendum at the Part 4 stage would be rather late in the day; possibly it would take place more than a decade hence. It would be long after the horse had bolted from the grip of the Welsh electorate.
	Our new clause is a replica of the Government's Clause 102 and must therefore be beyond ministerial criticism. If carried, of course, there would need to be some consequential changes to Schedule 6, which could be introduced at a later stage. I hope that the Minister will not press me on what the question for a referendum should be, because the Government have already thought about that, and they have got their question ready for the implementation of a referendum under Part 4. The same mechanism would apply to a referendum under Part 3. I beg to move.

Lord Rowlands: The noble Lord, Lord Roberts, fails to understand the fundamental distinction between Part 3 and Part 4. Part 4 would give primary powers to the Welsh Assembly, and neither this House nor the other place would thereafter have any responsibility or control over legislation—except the one catch-all provision that Parliament always remains sovereign. That is true of the Scotland Act as it would be true of a new Wales Act. Part 3 does not do that. It still leaves the fundamental power to decide whether the Assembly can further enhance its legislative competence with Orders in Council. Those Orders in Council must be approved or otherwise by both Houses. That is a fundamental distinction between those two positions, and therefore between Part 3 and Part 4.
	This also, in my view, distinguishes the question of whether there should be a referendum. The noble Lord, Lord Roberts, then ducks the basic question. It is very easy to devise the question under Part 4 because it would be a simple proposition: do the Welsh public wish the Assembly to have primary legislative powers? It would be very clearly understood. The question that would have to be put in a Part 3 referendum would be: do the Welsh public support the Assembly measure provisions in Clauses 92 to 101 of the Bill? Presumably, in order for there to be a referendum, these nine clauses would have to be printed out and circulated to every member of the Welsh public in order for them to decide if they wanted Orders in Council; if they wanted the proceeding then to go to Assembly measures; and if they wanted the reserve powers of Secretary of State contained between Clauses 92 and 101. I have a profound belief in the maturity and intelligence of the Welsh electorate; after all, it elected me for many years. However, I have grappled with Clauses 92 to 101. Can you imagine the discussion around the breakfast table about whether to vote, and whether to support Clauses 92 to 101? It makes a nonsense of the idea of a referendum on Part 3. It is unnecessary because there is a clear distinction between Part 3 and Part 4. It is also not the kind of material that makes for a sensible referendum.

Lord Davies of Oldham: There is a certain air of déjà vu about this debate because we rehearsed most of these arguments when we discussed Amendment No. 54. I certainly do not have a great deal to add to the response that I gave at that stage, particularly as anything that I would have sought to present at the Dispatch Box has already been delivered by my noble friend Lord Rowlands, who indicated the difference between Part 3 and Part 4. I heard what the noble Lord, Lord Crickhowell, said about where a referendum could fit in, but, unfortunately, this amendment tells us exactly where this referendum is meant to fit in. Subsection (2) of the new clause makes it quite clear that the referendum is about Part 3 and the Assembly measures.
	My noble friend Lord Rowlands ventured the hypothesis that it might be difficult to frame the question, but he was too kind to introduce to the debate the information that I somewhat churlishly introduced when we discussed Amendment No. 54; namely, that the Opposition Front Bench in the other place had had a shot at it. Let us give them their due. They wanted a question on Part 3; they wanted a referendum, so they had a shot at it. We all know the reputation of the shadow Attorney-General. We all admire a great deal of the work which he does and will continue to do in Opposition. He tried:
	"do people wish to be governed by Order in Council moderated in its detail by the Welsh Assembly".—[Official Report, Commons, 9/1/06; col. 119.]
	That was a good, honest try, but it was absolute rubbish in terms of anybody being able to run a referendum on such a proposition. Here rests the difficulty, which is at the heart of this amendment. At its heart is a requirement for the people of Wales to reach in a referendum a judgment on this part of the Bill. We will get to Part 4 in due course, and I have no doubt that the noble Lord, Lord Crickhowell, will be as eloquent then as he has been today, but his eloquence is misplaced in the context of this amendment, which requires a referendum which none of us could possibly conceive as being a realistic proposition to put before the Welsh people. I hope that the noble Lord will recognise that the amendment needs to be withdrawn on that basis.

Moved accordingly, and, on Question, Motion agreed to.
	House resumed.
	House adjourned at three minutes past ten o'clock.
	Wednesday, 3 May 2006.